It is, yes. Cramming InterCity trains full of commuters damages the quality of a long distance journey.
One other major difference between Reading and Milton Keynes is that passengers from various small stations (eg Mortimer and Earley) need to change there to get to Paddington. Your proposal would also force them onto the dedicated reading services. The current system is much better, the frequency of the fast trains giving real
quality connections i.e. If the branch train is delayed, there will still be another 80x along in a few minutes, and coming out from London, you can pick a service with an ideal connection time.
As many people have said, recasting the timetable won't add any more paths, so implementing this plan would actually make the quality of the intercity service worse, as frequencies would need to drop to make room for your services. As GWR services are often pretty full West of Reading, this means more people will be standing from Taunton and Swindon, a very unpleasant experience.