That problem leading to failure to connect to Penn Station is apparently of NJTransit's own making. They decided that their trains cannot deal with gradients higher than 2%. Experts that I have talked to say that even NJT's heavy trains with lard-a$$ed MLVs powered by quite capable ALP-46As should have no problem dealing with 2.5% grade in an enclosed and environment controlled space like in a tunnel. It is not like leaves will fall in the tunnel or snow and ice will form in the tunnel.
Apparently all it takes is 2.5% grade to make all the connections necessary without getting in the way of the 7 line. It is not like they will be running coal drags through those tunnels. They will be running light weight passenger trains with hugely powerful locomotives, and if they ever get their heads out for very dark places, even EMUs!!
So as usual there is more to the story than NJT has been willing to tell us. When you want to post-facto justify something that you want to do, one technique is to set oneself up with fake requirements.
And the other is to carefully hide away the document that contains the actual facts that might contradict the decision.
Notice that already in order to get the Portal South bridge to be 10' higher so that it does not have to be a movable bridge NJT has apparently agreed to greater than 2% grade, and that out in the open. When asked about that cryptic answer apparently was "Oh but that is different!". Ah yes.... of course!
My guess is that there are two problems.... one is the grade issue, and the other related one is the bowed out alignment of the tunnel which was mainly designed to get to 34th St station , in the absence of which the detour down to North Hoboken becomes questionable.