Although Charles Gardner is biased, his figures suggest that the VC.10 wasn't as uneconomical as you think and might not have been uneconomical at all.
Furthermore, I remain to be convinced that sticking to the "big-stretch" Super VC.10 would have been the panacea that you think is required. It's not required if the Standard VC.10 and "short-stretch" Super VC.10 were actually economical in the first place. Plus, if you're right, it will only be economical if the airlines that buy it can fill the extra seats with paying passengers.
What I think wrecked the sales prospects of the VC.10 was BOAC's attempt to cancel its entire order for Super VC.10s, it's successful attempt to obtain a £30 million operating subsidy for the 17 Super VC.10s the Government forced it to buy and the anti-VC.10 press campaign that preceded it. Avoid that and you sell more VC.10s.
What the VC.10 needed was a launch customer that wholeheartedly supported it. Someone in the mould of Freddie Laker at British Untied Airways (BUA) needed to be running BOAC in the first half of the 1960s.
It would have helped if the Government hadn't told BOAC to become a profitable company. Instead it could be told that it's job was to support the British economy by reducing the balance of payments. Therefore, it had to earn as much foreign currency as possible by carrying as many passengers as possible (even if it made a loss in the process) and to buy British aircraft whenever possible, which Gardner called "frustrated imports".
Making a profit wasn't part of Imperial Airways remit when HMG created in 1924 by encouraging the existing British airlines to merge. It's primary purpose was to aid British commerce by speeding the mails, which led to the Empire Air Mail Scheme of the 1930s. Being a customer for the products of the British aircraft industry and forming a reserve for the RAF were secondary duties and tertiary duties. This "state aided" airline wasn't intended to make a profit. However, to give Imperial Airways its due the size of the subsidy as a proportion of its revenue declined by the time it and British Airways Mark One were nationalised to form BOAC, also known as the Boa Constrictor.
