I think this has less to do with responding to JetBlue ATL-LGB specifically, and more to do the position of AirTran in the future... Consider this: America West converts to the low-fare model. AirTran instantly gets bumped from low-fare carrier #2 to #3 in terms of size. AWA brings with it a large western regional system, and a decent amount of transcon traffic. Southwest also has significant transcon operations from BWI, PHX, LAS, and MDW. Add to that the increasing transcon pressure from smaller LCC's (Frontier invaded DEN-Florida, Spirit added DEN, LAS and LAX service, and of course JetBlue's transcons) and pretty soon AirTran gets edged out of the low-fare transcon market unless they make a move soon.
I think AirTran wants to be more like America West... a strong regional player (like AWA in the west, AirTran is becoming in the east) with a decent transcon presence to keep passengers from switching airlines when they need to go transcon. I think AirTran was previously content to wait for the B717-300 and continue its work in the east and midwest. But a number of current events, which includes LGB-ATL and much more, hastened their decision to go trancon.
I think there is enough room for the LCCs in the transcon market... But the 'legacy' carriers should watch out... Is Delta's new DFW RJ hub really going to compete with the LCC's (under their new arrangement you can fly DCA to PHX or ORD to TUS over DFW on all RJ's, and RJ's are much more expensive on an ASM basis)?
I think this is a good move by AirTran under one condition... They order some longer range aircraft and take over this flying quickly. Boeing and Airbus must have some appropriate aircraft available for quick delivery.
This arrangement with Ryan Int'l has a second benefit that most here are overlooking... This is the least risky way for AirTran to test out service to the west coast. If the service fails, they did not add the new fleet type, specifically to get to the west coast, only to have it fail (part of the problem with Midway of RDU, they seemed to do this twice, once with A320's and once with B737-700's). If it fails, AirTran cancels the contract with Ryan, and its done. If it works, AirTran acquires some longer range aircraft, and takes on its own flying, and gets rid of Ryan Int'l. AirTran can use this arrangement with Ryan to determine what kind of revenue possibilities the longer range aircraft afford before actually acquring the aircraft. I'll bet alot of airlines wish they could do something like this in order to minimize the risk of a big change.