The 195 has 112 seats vs the 737 MAX 7 with 138 seats. That's pretty similar. And the Embraer is cheaper and has a nicer/more spacious/more appealing cockpit and interior. This is the 737's age showing through here; despite the 737 being larger, it's more cramped inside than the 195.
Granted, most 737 MAX orders were for larger variants, and also the 737 flies farther (the Embraer is very much more of a regional jet). But there's a lot of routes that could be done using either, and the Embraer wins many of those, even before you consider the fact that the 737 MAX flat-out can't fly them at all since it's grounded indefinitely.
So overall they've got superior competition from Airbus throughout the entire segment, and superior competition from Embraer at the bottom of the segment as well. Boeing is in a rough spot. They should have built a clean sheet redesign of the 737 awhile ago to handle the same segment, but they did not, and now they're really suffering for it.
Airlines like southwest need to be convinced to adopt the new plane. Their major claim to fame is cutting costs by only having one airplane that saves training costs and pilots can fly anything they have. (less spare parts for maintenance, but they have already lost that with the max and other variantes)
Boeing deserves the overwhelming majority of the blame here, not one of their many, many customers. Southwest did not want a plane so unsafe that it cannot fly. If their wish list desires were not all reasonable, then it's Boeing's responsibility to let them know it.
That is a different point. Southwest (they are not alone, though they are the obvious example) is not going to buy any plane from someone else because the 737 is so embedded in their company. They can take something else, and reserve the right if Boeing cannot deliver. However it is unlikely anything other than the 737 will be bought in the foreseeable future.
Now if someone built a plane with the same type certificate required with capacity from 25 to 300 (exact bound are of course negotiable) passengers and can deliver in quantity that would catch South west's attention and probably change their entire fleet. I suspect that isn't possible but...
From a consumer's perspective (primarily Alaskan and Delta), I've only flown on Embraer aircraft domestically (not by choice, by consequence), and 50% Embraer for short international hops. From my perspective, your comment rings very true.
I fly the 220 regularly on routes within Europe and it is rapidly becoming my favorite plane for short hops (< 2500 km). It doesn't seem to be as easily perturbed as older planes, nice cabin, very quick turnarounds so rarely issues with delayed flights due to slow turnaround. This matters a lot because once you miss your departure slot on many airports in Europe it tends to get a lot worse right away, not just a few minutes.
