Yes, that's what I'd propose, and the big advantage of it is that it would only take out a couple of warehouses (better than I thought now I've seen it on a map) and existing railway land, and no housing whatsoever. Milton Keynes is key to EWR, so having a large proportion of trains not serve the centre is just mad. To me you want most trains operating Cambridge-Bedford-MKC-Oxford, even if you do have say 1tph that runs fast via the flyover.
With the WCML "VHF" timetable still running it'd be hard to path, but post HS2 to me it would be very sensible indeed. Not just benefits for the route as a whole, but also enabling increased use of rail to get from Marston Vale stations (and the large housing developments likely to crop up around them) to central MK. And because with the best will in the world huge swathes of north MK are not going to drive past the A422 down to Bletchley to park up and take the train to Cambridge/Bedford, they'll just drive the whole way. But they might to MKC.
If necessary, there is room for a fifth track all the way up on the east side of the WCML (plus using the Up Bletchley and Down Bletchley that exist now and are barely used) without taking out any housing due to the large amount of space left around the railway. Again it might take out a couple of ageing business premises and some car parking, but nothing that would draw massive objections.