Actually, it appears to me that the reason US (as well as DL, CO, NW, etc.) is reducing fares at ISP is the fact that ISP is one of the lowest-yielding markets out there for airline service. It's got lower average fares than TPA, MCO, LAS, FLL, etc. As the dominant player (by far) at ISP, WN has set the fare levels and is keeping them relatively low given that they face a lot of low-fare competition down the road (for Long Island passengers) at JFK. But WN continues to expand there, which says that they must find the market to be profitable.
I understand that Art and others have their own personal reasons for not wishing to fly WN (such as the lack of assigned seating and/or first class), but I simply cannot understand some of the inconveniences they go through as a result. I remember Art once related the fact that he connected on American Eagle via BOS to go from ISP to BNA; while I can understand the desire for an assigned seat, those ERJ's don't offer first class, and that had to add nearly three hours to the trip time. Not to mention the fact that BOS is about the absolute last place I'd try to make a connection. Or how folks have been willing to put up with all the problems that US Express has in PHL in order to make a connection on an older, noisy turboprop. I suppose it's just an issue of how the value of your time and/or willingness to put up with inconveniences balance out.
The problem with ISP for US is that probably 90-99% of passengers are connecting at PHL. And offering that connecting service on a high-CASM turboprop (along with another express or mainline flight out of PHL) gets to be very uncompetitive with WN's cost structure. The problem with a hypothetical ISP-CLT is that a large percentage of the passengers (absent good revenue management) would be traveling to Florida, largely at fares set by WN. You might pick up some traffic to smaller Southeastern cities, but without two or three daily RJ's, you won't be competitive with Delta for business traffic. And WN's got as good or better coverage of everything west of the Mississippi through connections at BWI, MDW, BNA, or LAS. It is just very difficult to make acceptable yields from ISP given US's route and cost structure at this point.