But in central London trains and tubes go pretty much everywhere, with a few exceptions which would obviously be maintained by bus. Surely it makes sense to transfer resources to outer London where the rail alternatives are much more scarce?
What are you defining as "central London"?
There are plenty of places in Zone 2 where it's just as quick to get a bus to, say, Trafalgar Square, or Marble arch, as it is to use the tube. That's because even if you do use the tube, you likely have to do a substantial first leg on a bus, and then spend time changing modes, possibly with another tube or rail change before you reach your destination.
For a lot of people, including those with mobility problems, that's a fairly major issue.
As for Oxford St particularly - as others have pointed out, the tube doesn't really help you if you want to get from somewhere halfway between Tottenham Court Rd to halfway between Marble arch and Bond St. Personally I would just walk it - but that doesn't apply to everyone. I'm not sure if providing taxis for those with mobility problems is really a practical solution.
There may well be good arguments for reducing the number of buses that use Oxford Street - but as I understand it, this is a very complex thing to sort out because you end up breaking all sorts of east-west journeys. I don't pretend to know the answer here. However I can recommend reading the London Reconnections series of articles which discuss this in the context of the proposed pedestrianisation of Oxford St (ultimately blocked by Westminster Council).
The leading source for independent news and analysis about transport in London and beyond. Award-winning coverage of transport infrastructure and politics alongside stories about the history of the Capital's transport networks.
www.londonreconnections.com
I wouldn't rule out the idea that there are various changes to London's bus network that would be well justified (and some have already been made, in connection with TfL's already reduced funding, and the implications of the Hopper fares) but I'm resistant to the idea that things are as simple as some are suggesting.
Certainly there are a lot of journeys within Zone 2 and 3 (I don't know whether you are including that is "central" or "outer" London) which simply aren't possible by rail or tube, without using lengthy bus legs at each end that would make the whole thing take longer than just getting a bus all the way. Just for example... try getting from Forest Hill to Brixton. It's already rather painfully slow to do this by bus - but at least you can do it directly, or with one change. Trying to do that journey with feeder services to rail stations - it would take even longer, and furthermore it would likely send you via central London where things are even more congested. Or - you prompt a load of people to try and do the journey by car, which is the last thing you want to encourage.