I don't know, Ivo, it's an interesting idea, but I'm not convinced that heavy rail is the most effective means of providing such a network of services. (It is also true that Oxfordshire - or at any rate certain parts of it - has, for a shire county, an unusually good network of rural bus services - and, unusually good quality bus operators, generally in the same part of the county, too)
The problems I see with your proposal (none of which are, ultimately, insurmountable, I suppose - and indeed some of them will be resolved in the relatively near future) include:
- limited capacity on the North Cotswolds line (at least until the section between Wolvercote and Charlbury is redoubled), as well as around Wolvercote junction. And also, at least for some more years, at and around Oxford station
- the old chestnut of the unattractive location of Oxford station for the city (the question of where a station in Witney would go, approached from this direction, is another potential problem - maybe a "parkway" on the northern edge of the town might work, but it'd be hard to get to the centre. Sainsbury's is now where the original station was)
- the former route (while requiring a longer branch line) at least served one further source of custom (Eynsham). Between Witney and Combe it's mostly fields and the odd hamlet.... How about converting Hanborough into a "Witney Parkway" station, and providing some form of frequent, enhanced transport (busway/light rail), from there? Main problem: the relatively infrequent (=hourly) train service to Hanborough. Solution: extend the local services that terminate at Oxford. Obviously this then creates other problems...
- I can't see how such a plan, when all factors are considered, would compete attractively on time or cost with car or even existing bus services (even with current A40 levels of congestion) . Combe to Oxford is already typically a 15-20 minute journey; Oxford to Didcot can easily be another 20 minutes. If there were to be a *frequent* train service, perhaps this would work (bear in mind there are typically as many as 6 direct buses an hour between Witney and Oxford in the daytimes, even outside the peaks), but I can't imagine something even close to a turn-up-and-go service being viable for such a route....
It'd surely be much easier to reconnect Chipping Norton to the rail network (even if the town is much smaller than Witney, and wealthier, and with less demand for rail)...
There definitely needs to be some blue-sky thinking in this area - but I think that relying on the Cotswold line, at all, probably creates more problems than it might resolve. I'd probably favour an entirely new route from Witney, south of the old route, joining straight onto the main line just outside Oxford (perhaps with a new station at Kennington)....but I can't quite see this happening either...
But seriously though, they are two quite large places to not have an actual NR station in the town (and rely on the Bo'ness-Kinneil or Linlithgow and Polmont), I'd fully support a new line serving the two from Edinburgh.
Might be a nice thought experiment to see if there's a sensible new alignment out of Barnstaple and past Braunton one day.
