I think it depends. If those using LNWR cheap tickets from London to Birmingham would have used Avanti’s trains instead, it would indeed reduce overall revenue. However it they primarily would have used coaches or not travelled instead, you could argue it actually improves the economics of the railway.
I agree with that. When I do Birmingham to London, or more accurately travelling via Birmingham from Hereford, it's on a WMR/LNWR Only fare. I would not choose Avanti on that route because of the ridiculous prices they charge, so if the cheaper fare ceased to exist I would go elsewhere for my travel needs. Which would usually mean revenue that could go to the railway would go to National Express.
My sister sometimes has to travel from Cheshire to London, but chooses LNWR because of the huge price difference. She wouldn't go on Avanti because of their outrageous fares, so again if the cheaper fare wasn't available it would be more money lost to National Express.
That might well only be two examples, but I can only imagine how many other people turn their nose up at Avanti and go elsewhere. In the examples I provide, yes that's not much revenue and not too often, but when there's a cheaper and more convenient option on National Express the fact is the WMR/LNWR option to do the journey by rail is enough to pull the money over to the railway. When I need to take my bike, then yes the coach is not an option, but for the other times...
So I am very much against losing such a ticketing option!