Flying jets at low altitude

It's always been my understanding that jets are inherently uneconomical
to fly at low altitudes because of the amount of fuel they burn down
where the air is thick. Now I read in the NY Times
(http://nytimes.com/2004/06/14/busine...D-ARMS.html?hp) that Boeing
just beat out Lockheed for an anti-submarine contract, and we're going
to be replacing P3's with 737's. Can you really fly a jet at 200 MSL
efficiently enough to make this make sense?

I'm probably somewhat naive when it comes to stuff like this, but what
was wrong with the current crop of P3's that an avionics upgrade
couldn't fix?