British Airways operate a flight from Edinburgh airport to Heathrow airport every morning in a 767. Aren't these wide-bodies meant for long haul flights?
Aircraft selection for a particular route is quite complex, especially for a large airline that operates many different types of aircraft. You're correct: generally speaking widebody aircraft are used for longer flights, but there are a number of other factors at play. Some of these could be that a route has a very high peak demand, where a lot of people want to go from A->B at a given time. LHR to Edinburgh seems particularly likely to be one of these city pairs. Sydney to Melbourne is another one, and is only about 400 miles if my memory serves. In both of these cases there is a dominant national airline in the mix (BA, Qantas) whereas in the USA there are almost always 3 or more large airlines operating any heavy route (New York to Boston, or Washington DC to Chicago, etc).
Aircraft scheduling also plays a role. For example, the 767 in question might be scheduled to fly from Heathrow to Edinburgh and back in the morning, before picking up a long-haul flight to the USA in the afternoon. If there's a 4 hour "gap" in the schedule for that particular aircraft, it might make more sense for the airline to run it as a short out-and-back rather than have it sit on the ground at LHR.
Also, Heathrow is notoriously busy, and getting a takeoff/landing slot there is extremely expensive. The high landing fees are charged at least partially regardless of the size of the aircraft, so there is some economic motivation here to divide those fixed costs by a larger number of passengers.
As another data point, I checked the daily schedule between Haneda (the main domestic airport in Tokyo) and Hiroshima (~400 miles away) and found the following list of flights: 9x 737, 4x 787, 2x 767, 2x 777 - so in this case you have almost half the flights on widebody aircraft, and probably closer to 75% of the total seats.
It's also entirely possible (I haven't checked the schedules) that this 767 run is temporary, due to a period of peak demand or at a point in the year where the demands on that aircraft type are lower elsewhere in the route structure.
So in summary: it's very hard to know all the reasons that a flight might be operated with a specific type. You need to know a fair bit about the economics of the city pair, the fleet makeup of the airlines, the likely competition for the route, how the route timing interacts with other flights, the congestion level of the airport, and a lot of other things.
The size of the airplane mostly determines how many people it can hold (around 275 passengers for a B767). If Edinburgh to Heathrow is common route for businessmen and woman who commute often then using a larger plane is more economical for the airline. Using something such as a Bombardier Q400 which is a common "puddle jumper" airplane might cost less per trip, but it would need to make significantly more trips.
A Q400 holds around 85 passengers, so you would need to make over three trips in a Q400 to transport the number of people who could fit in a single 767.