Perhaps it's something more basic? Perhaps the interisland market is just limited?

Southwest realises that in its choice of the outer islands as destinations. Honolulu is getting too expensive. Southwest customers like it cheap. 

Their customers find it too expensive to visit two islands in their stay. Popularity of interisland may be mainly with locals. Remember how popular the Superferry was?

Good mass transit in Honolulu may boost interisland traffic for the same reason. Another future benefit of rail.

Island Air has an inherently bad business model? They shouldn't have tried to expand so rapidly? They need to sell their new planes and reduce their debt.