I'm sorry that the points I tried to make were not understood. Perhaps I tried too hard for brevity.
My understanding is that VWC is now a management contract, with almost all income passing to the Treasury. As the original franchise paid a premium, I assume that it's a positive, and probably quite large, amount. I thought I made this clear in the my OP; I never expressed nor implied an opinion about Virgin management, who are clearly unaffected by revenue abstraction. The step from my statements to me having the opinion about Virgin described is a non-sequitur.
My point about the high level of LM subsidy was not that it was subsidised for commuter services (I did know!) but its scale; to be second it would certainly beat 2 of the 3 former NSE - South companies (now SW, Southern and SE) and, if Northern is the highest subsidised (my guess) then it gets more than all 3. Compare the intensity of LM Euston services with those 3...
The DfT specified the TV services but not pricing. I obviously have no idea how the DfT mind works, but I would suggest that it is primarily to provide a service to Euston for the small towns mentioned, and also to provide them with services to the slightly larger towns of Stafford, Nuneaton and Rugby. Here are some more facts in support of my original statement; looking on NRES for Wednesday 20th September, here are some fares available from LM, on more than one train, during the daytime;
Stafford - £8, Nuneaton £6, Rugby £6. These are obviously stations where a competitive Virgin service is available and of course they were not in the old NSE commuterland.
From a very large town that IS in the old NSE area, Northampton, the fare under similar circumstances is ..... £7.50. Other non regulated fares are in proportion to the above.
If the subsidy is intended for commuting it seems strange that a commuter station has a fare per mile up to double that of ones further out. The only possibility I can think of is predatory pricing against Virgin, but would be interested by other suggestions. Bear in mind that, from casual observation, many of the TV services seem to be full and standing.
With regard to the growth in population of the small towns down the Trent Valley it may be also of interest that the most rapidly expanding town in England (from quite a high base) at the moment is Corby. By comparison, the TV towns do rather well with their train services!
I intended my OP to be composed of facts and a rhetoric question and, re-reading it, I am still surprised that so much opinion has been inferred. My brevity means that every word (almost!) is important to the understanding of my logical argument. I welcome being told of factual errors - for instance, I am not sure that VWC is a management contract - but perhaps not some of the other comments.