When do we reach saturation point with the low cost airlines?

Are we getting close to saturation point with some of the routes operated by the low cost carriers (LCC)? It seems that they are having to search further afield for viable new routes, which was originally said not to work with the low cost model. Take Funchal in Madeira as a case in point. Yesterday easyJet announced two new routes from Stansted and Bristol starting in October. Funchal is about 600 miles south west of Portugal, a fairly traditional and you would think mature travel destination that has happily managed with charter flights and the scheduled services by British Airways and TAP from Gatwick and Heathrow respectively. Now there are to be daily flights from Stansted and three times weekly flights from Bristol. These join the new FlyGlobespan services from Aberdeen and Edinburgh which are once weekly. This means potentially 12 planeloads per week, have the sums been done correctly?
What about flights to Krakow, two new routes yesterday from easyJet. Now to us Krakow is hardly the season's hot tourist destination but easyJet, Skyeurope, Ryanair, Jet2, Centralwings as well as BA all fly there from the UK, on fifteen different routes. We know there's probably more Polish people visiting and working in the UK than the Government is letting on, but that's a lot of seats to fill.
We've also noticed some of the LCC's are dropping routes. They seem to make a lot less fuss about this than when they announce new routes! More planes are coming on stream and they seem to be scratching around for viable new routes to fly. Load factors and prices are down, the only way out seems to be to fly further, so let's try Tel Aviv (Thomsonfly), Sharm el Sheikh (FlyGlobespan), Funchal (see above), or if you're coming from a slightly different model New York and Bermuda (Zoom).