Don't agree with Chris Kernow - think he's gone a bit OTT.
More considered thoughts here :
http://www.dreurovision.blogspot.com
As ever in all things European, we are out of sync. As a nation, the perceived view of Eurovision is that it is a camp-fest for tragic pop songs. Sometimes it has been, but increasingly it isn't. However that doesn't change what Brits think of the contest. Arguably, if it did, the BBC would have much more of a problem, as I suspect if it was taken more seriously, the ratings would drop.
We are in a near-unique position because our music industry (along with the American one) dominates Europe already. Whilst Eurovision is often the only route to break out of your own country in other areas in Europe, it isn't needed, or wanted, as a route for British acts. In other countries it has significance in real-world business terms to the domestic music industry. In the UK it is an irrelevance to the UK music industry. People always seem to forget or ignore this and suggest we send Take That or similar...
Historically we have had success, but much of this has been down to being able to sing in English (when only a couple of other countries were allowed to), and the smaller-scale, more Western European, nature of the contest.
The other thing to remember, when comparing the UK with Sweden (which many do - because MF is such a great TV show) is that Melodifestivalen is NOT primarily there to select Sweden's Eurovision entry. It's there to be a ratings juggernaut for SVT. The goal of winning Eurovision is not the aim of MF, the goal of MF is to be, as usual (Royal Weddings ignored), the most watched show in Sweden of the year. That's why it has an insane budget, ratings through the roof, and such amazing production values. It really is, in audience terms, the Swedish X Factor.