Boeing 'headed off at the pass'?

The only part I can add to your counterpoints at this time (Im pretty darned tired) is that many months back there was a AWST article on SouthWest regarding its working with Boeing on the next gen aircraft. If airlines are given alot of say in its design more could join the 7Y7 camp just to be in the air first.

In regards to the winglets

Airbus already is exploring the use of winglets and next month plans to start testing a second design to determine which aerodynamic configuration is optimum. The first version has completed 10 flights and 30 hr. on two aircraft, one from JetBlue in the production configuration, and an early Airbus prototype (MSN1). The winglets would likely require wing stiffening and Heinen says the weight tradeoff
Winglets

I can't read the article on AWST as I'm not a subscriber but from what you said that appears to be the same plane I posted a picture of.

My view is that the Boeing will be launched as a replacement for the 737 anyway but that the A320E will act as a 'protective barrier' around Airbus existing customer base, for a few years at least.

I think Boeing will repeat the 777 strategy: be late and right and not early and wrong.

They waited with the 777 and they clearly won. I think they will wait for the next gen. engines to appear and then launch the 737 replacement...

In this weeks Flight Boeing are quoted as being 'in no hurry at all' to launch the new type so that looks like Airbus will get the extra time it desires.

Carch, the 777 as it stands today was Boeings third attempt at such a plane after the earlier versions, both based on the 767 and one a tri-jet, were cancelled after being snubbed by the airlines so your view of them patiently sitting back and then stunning the world with the perfect plane is a little misguided, the 777 went through the same painful birth processes as the Sonic Cruiser/7E7 evolution.