Wizz is strong in East Europe where structural hurdles persiste, notably the Russia/Belarus/Ukraine airspace and markets are closed to them. There would be demand however considering the proportion of russophones in East Europe.
The diversification to middle east was probably subsidized as a way to give an edge to Etihad in accessing secondary or tertiary indian cities. To Wizz, it was oversold based on wishful thinking on behalf of UAE authorities re Indian market access. The hot harsh environment is just an excuse to save face. Sure the HD 321s carry a little less pax per engine than an Emirates A380 and at lower yields. But that's not the point of the operation.
Abu Dhabi would have had a better chance of success if they had partnered with IndiGo. Indigo as well: Turkey is too far away.
Now what for Wizz? Even if they refocus on their traditional market they will stay hampered down by the Russo-Ukrainian war which limits their routings and market access, let alone access to cheap kerosene. I also assume the yields are lower in Eastern Europe as the mix is more heavily focused on VFR than Ryanair's western clientèle which is probably heavier on leisure and business.
Operationnally, Wizz are maxed out on efficiency with the 240 pax 321s while Ryanair still has the Max10s in the pocket. So they can't gain anymore on the fleet. Maybe they have some network optimizations beyond the ME pull out ? Not a big opportunity.
Honestly I don't see them recovering in any significant manner until they gain access to the currently closed airspace and markets in East Europe.