The crucial factor is the connection with the fastcat ferries to Portsmouth, which a high proportion of passengers are transferring to or from. Those run mostly at even 30 minute intervals, so at present the trains connect well only once per hour, the other hourly train misses the ferry in one direction and gives a longer wait in the other.
A 3tph service at 20 minute intervals could be run on the present infrastructure, as that's what the existing loops were set up for. It would of course need more units to be in use, and there may not be enough serviceable now.
A side benefit of the Brading loop is that trains would no longer need to cross south of St Johns, so Island Line could use a single track and allow the steam line to extend from Smallbrook Junction into St Johns.