The faster journey time thing isn't relevant.
Surely you can see that saving perhaps 5 or 10% of the cost (had a lower design speed been specified from the outset) is a perfect example of 'penny wise, pound foolish'?
Imagine if the GWML had been designed around 25mph running, which was about the fastest speed that steam engines could reach at the time. It would probably still be as slow as the Gunnislake branch!
Furthermore, whilst speed isn't everything, it does matter. The faster services run, the fewer trains needed to run a given frequency (thus operating costs are lower). And I'm sure you would be the first to agree that if Plymouth to London were possible in 1.5 hours, this would change things significantly...
It's all a moot point at the end of the day though, as the design speed is baked into what's under construction, and reducing it now will barely save anything.
Arguments on capacity, equally now seem harder to justify when fewer people are travelling .
There is a notable reduction in commuters and a huge reduction in business travellers - but leisure passengers have increased compared to pre-Covid. I'm sure that Avanti would be in a more similar position to LNER (who have more passengers overall compared to pre-Covid) if they were reliably running a full timetable.
In any event, how do we know that passenger numbers won't increase in the future, as they did after the recession of the early 90s? Passenger numbers on the WCML increased massively following the upgrade at the start of the century - why wouldn't they do the same again after HS2 opens?
What HS2 seems to be now is a way of turning Manchester (and perhaps Birmingham) into dormitory towns for London. With that , eventually you'll see the same crazy property prices and see young locals forced out . So be careful what you wish for, as places like Manchester could soon have all the personality of Milton Keynes, and all the priceyness of London.
You say "seems to be now" as if its purpose has changed. Whilst the partial scrapping of the Eastern leg is a huge mistake in my view, it still delivers many of the same benefits as before, certainly to the other towns and cities it will still serve.
As for these areas becoming dormitory towns, the impact of HS1 suggests otherwise. And again, as you alluded to, commuter numbers have decreased with the advent of WFH - so this effect would not be as strong as it might have been before Covid.
Let's focus on making our existing railways great
What exactly does this mean, in practice? What other shovel-ready projects are there, which could deliver a similar Benefit Cost Ratio?