You missed:
• Doesn't go near London so DFT don't give a damn about it
And it isn't perceived to belong to a single geographic area so no urban area transport authority is pressing for improvements to its services.
The train was fully packed all the way and thankfully I reserved seats, however when we decided to do a return trip from Exeter to Bristol, I paid £40 Each for the privilege of having to stand by the toilet. we where packed in like sardines.. it was awful.
Exeter-Bristol generally isn't too bad out of peak hours - I've travelled over the route on Voyagers hundreds of times over the last decade (mainly on Saturdays but also plenty of Sundays and weekday evenings) and never found getting a seat a problem out of peak times or on certain trains on Sundays. Usually there's standing between Taunton and Bristol on the 0723 from Exeter and 1711 from Bristol but that's about it.
The anytime standard class return fare was about £35 last October and the off-peak return fare about £30 so not sure how it cost £40 each. Splitting tickets at Taunton where everything bar one train a week stops gets the price down further without restricting flexibility.
TPE are now lengthening the majority of their services to 5 carriages and Liverpool to Edinburgh services via Manchester and Darlo will mostly have 5 carriage trains with over 300 standard class seats. Still a work in progress though.
Some of those routes may have been sparse, but the core route Bristol-Birmingham-Northeast was pretty regular...………..just sitting on the wall at Dawlish and watching trains stream through every four or five minutes, a large proportion XC, was enough to prove that.
A quick check of my rather tatty September 1991 May 1992 BR timetable shows that on both weekdays and Saturdays there were a grand total of 10 trains a day each way from points north of Birmingham to Plymouth / Cornwall, one to Paignton and a sleeper from Scotland (abolished at privatisation as no-one would have wanted to run it). This included a 2 hour gap south of Bristol in each direction in the late morning. Not terribly regular. Several trains also skipped multiple stations e.g. the Cornishman stopped only at Bristol Temple Meads and Exeter St Davids between Birmingham and Plymouth. Great if you like trains with quirky non-stop patterns, but not much use to users of Cheltenham, Bristol Parkway (serving North Bristol) or Taunton.
Getting back OT, there is a general consensus here that 4 coach Voyagers are too small. This is also a view which seems to be shared by the general public in my experience. However XC haven't had any new stock since 2008 on their 'intercity' routes save for 2 driving vehicles allowing them to create 4 x 4 coach trains to replace 2 x 5. Not a massive difference. The DfT seem in no hurry to do anything. More 125mph DMUs may become available in a few years time, but I wouldn't expect any changes until then as there's no political pressure demanding that something is done about XC's capacity.