You aren't seriously trying to say they aren't attempting to compete with the train? They are even offering Railcard discounts, which I don't think they offer on other routes. If they just ran between Glossop station and Sheffield you would have the same journey opportunities with the minor exception of Hollingworth, and even from there there are already adequate buses to Glossop, Stalybridge and Ashton where you can connect onto trains or trams.
The railcard offer is a gimmick. Do you honestly think any commuter is going to spend an extra 40 minutes on a bus (each way) to save a bit of money? Who else? Senior and disabled passengers will have ENCTS passes anyway, and there are student fares as well. So what market does the railcard go for.... those between 18-30 who aren't students and might have a railcard? If they are targeting the train, it's pretty niche so the headline is more important than the reality.
As for the "people can always change at Glossop" argument, why would people want to travel by train from Manchester to Glossop, get off and then onto a bus so they can go walking from Snake Pass? A direct bus is much more convenient and it's a journey that people can't make currently so it won't be abstracting trade from the Glossop line anyway.
Ultimately, we will see if there is a market that they can develop and exploit. I'm doubtful but I'm pleased to see a business taking a bold commercial decision. However, any abstraction from the Glossop line..... minimal. This venture will live or die on its own merits, and the financial implications lie with the operator in the main.
Reading the T&C's nothing specifically is mentioned about 'new' routes but I am told by friends at other companies that you can indeed gain grant towards new routes - so I am actively looking into this for our new route that started 2 weeks ago. It would certainly be a financial help towards many operators to start new services to attract more people to public transport... I'll try and report back in the future.
There is, of course, separate funding for the restoration of services lost through austerity. Roger French reports on that with services now being supported in Oxfordshire.