It has little or nothing to do with Virgin, the fares on this route were high long before they came along.
Yes the franchise has changed hands a number of times, so there are multiple parties to blame, but the current owning group is no exception and is in control of the fare right now.
The issue is that if you start cutting the York - Newcastle fare then that will create anomalies where splitting at York will undercut the London - Newcastle fare.
It is already the case that you can "split" to reduce fares on this line, e.g. York to Newcastle is bonkers, so you can split at places like Northallerton to bring the price down.
As for London to Newcastle, the Super Off Peak Return (SSR) is £132.70, while for London to York it's £106.20. That's a difference of
£26.60. I'd accept a reduction to something around the £27 mark, which would still be expensive, but acceptable.
The equivalent fare between York and Newcastle (SVR) is a whopping £42.60. I am
not suggesting cutting the fare so that it becomes cheaper than splitting at York (though it is cheaper
right now to split at York if you avoid VTEC north of York), even though such splitting opportunities exist with other flows.
Splitting isn't unusual; I'd say for most journeys, you can
already pay less if you either "split" or buy further and start/finish short, and the likes of TPE are making changes to
even more flows, where splitting now becomes beneficial!
