Sorry, I'm afraid this will be a bit lengthy but I feel it might be necessary in order to contribute a maybe somewhat different perspective:
I don't want to get too much into the dreaded issue of European military spending. Trust me, there are plenty of Europeans who would love to see their governments reset their priorities but sadly the liberal naive spirit has many European societies in their firm grip with many politicians not having the guts to eventually make the necessary decisions. There is a shift noticable over here but it is very very slow and I can only pray that we won't completely loose the US's favor. Anyways .... no point in lingering in these sad political issues. In order to bring this back to the more technical aspects of the initial topic on why the UK retires their Tranche-1 Typhoons, if I may add a European perspective. The issue with Tranche-1 Typhoons is about the same as the issues with Block-1 F-22s and the reasons for retiring the Tranche-1 Tiffies are similar to why the USAF wants to retire their 30+ Block-1 F-22s. I talked to some old acquaintances from my active Luftwaffe days wo still serve with FW-74 at Neuburg Airbase in Bavaria, a squadron that has QRA duty in Germany and currently operates Tranche-2 and Tranche-3 Typhoons. They do know a bit or two about the issue. The difference between a Tranche-1 Typhoon and a Tranche-2 or even a Tranche-3 Typhoon is like comparing a 1st generation VW Golf to a modern day Mustang. There are worlds between them. While modern Tranches work with automated data uploads and have at least USB-3 ports Tranche-1 Typhoons still work with floppies can you imagine?! You can't properly integrate new tech and new weapons including A/G ammo because contrary to Tranche-2s and -3s they lack the open architecture. Maintainers have to learn completely different routines for these units and constantly have to shift in their procedures between Tranche-1s and the later Tranches. It is similar to why the USAF wants to divest their Block-1 F-22. The entire logistics chain and also the operating procedures for aircrews are different. The USAF even stated that aircrews who trained in Block-1 F-22 had to untrain some parts in order to properly work with newer Block F-22s once they joined active squadrons and it is similar with Tranche-1 Typhoons. The only thing these Tranche-1 Tiffies are good for (apparently very good for!) is traditional air combat but just employing a second logistics, training and operation chain for these few units in order to maintain their sole air policing role is simply cost prohibitive. The RAF is not the only service who want to let go of their Tranche-1s. The Luftwaffe and the Italian Airforce is planning to do the same, i.e. divest the Tranche-1s and replace them with Tranche-4s and maybe -5s. The first Tranche-4 "Quadriga" units are already on order in Germany and Italy and the RAF will certainly follow at some point. As far as I reckon the RAF are already eyeing on Tranche-5 with their own new radar set. Only Spain and Austria are pondering about upgrading their Tranche-1s to some degree. It is far more economic and a way bigger boost for the several Typhoon fleets to get rid of the Tranche-1s and invest into Tranche-4s and hopefully -5s.
The Typhoon is still a very formidable Gen 4.5 conventional aircraft that will still serve pretty well for the next decades. It will ultimately fill a similar role as the USAFs F-15EX and will do well in combination with the F-35. If you argue that the Typhoon is obsolete or outperformed by other types you would also have to bring up the same arguments against the EX. There are currently two USAF exchange pilots serving with FW-71 and FW-74 in the Luftwaffe, one of them an original F-22 pilot. I was able to chat with him and he is very fond of the Typhoon. I was able to exchange a few words during the last allumni meeting last summer at Neuburg and he told me that it could still be a "King Kong of air combat if the right people only found the necessary will to follow through. It doesn't need stealth for what you guys over here intend to use it. It's an extremely capable aircraft and I really like to fly it. However the cockpit ergonomics are still not the best and would need improvement but that's another thing." (His words, not mine.) Anyways, the Typhoon's prime mission set is actually to be a "over engined airborne police car" at least over here in Germany. There is a certain A/G capability and it can carry GBU-48s and -54s along StormShadow/Taurus and Brimstone but the focus is still on A2A. The main attack plattform in most European countries will be the F-35 and the value of the Typhoon will be in combination with that type similar to what the USAF plans in part with the F-15EX in combination with the F-35, serving as a missile and large ammo truck being the most mundane option I suppose. If you properly invest into the advancement of software and EW-power those Gen 4 / 4.5 airframes can still be kept relevant for quite some time. Shame just that once again only the USAF seems to have cherrished that way of thought more than us Europeans ... sadly but no surpise I'm afraid. I do not see the Typhoon being "surpased" by those aircraft with a potential of being likely opponent types such as the whole Flanker or Felon family and I do not see the new Asian types already being on par with it except for the J-20 based on what little is known about it and quite frankly I would also put still some question marks on the Block-70 F-16s and MAYBE! even the EX. The Typhoon can still put up a very proper fight it is just a shame that it just never managed to gather enough political and industrial goodwill and stamina to finally exploit its full potential but that is not a new phenomenon (Tomcat-21 anyone?!!!). Granted, the advancements of modern technology and the dramatic shift in how today's airforces seem to envisage future air combat simply would make any substantial efforts increasingly pointles by now. And the current stance of some European airforces actually seem to reflect that. The UK rather concentrates rather on their Tempest project with an increasing focus away from the actual airframe and towards the cloud and also Germany rather focuses the bulk of their spending in the FCAS-compound on everything that is NOT the NGF airframe, i.e. rather the cloud, UCAS systems etc. ... quite to the detriment of their "partners" in France /