Well people not using the buses would be an issue, yes many people do use cars as they are convenient but is there any evidence that they would change to bus if a London style service was provided? If the buses had never been deregulated to start with then people may well have continued using them but it's not as easy to get people out of their cars once they are in them.
As I mentioned earlier on, all public transport has experienced increased demand - except de-regulated buses. The rest of the country has been experiencing increasing fuel prices, congestion and (up until recently) an economic boom just like London has. There is no reason to suggest that a regulated bus service wouldn't attract increasing numbers of passengers elsewhere.