It seems to me that the biggest stumbling block is the capital improvements necessary to provide the service. A forced change at Lansdale between electric and diesel will, according to the study, add between 10 and 15 minutes to the trip -- which might discourage some daily commuters. Electrifying the line beyond the junction in Lansdale of course drives up the cost of the project.
The positive side to any extension over this line is that it would not add to congestion on the ex-Reading SEPTA trunk line between there and Center City. Since the Doylestown branch (between Lansdale and Doylestown) is basically a single track line about half the trains turn at Lansdale anyhow. So those trains can be extended over the restored Bethlehem branch.