Should XC try and improve capacity on the core. Yes. This much is obvious.
The problem then becomes how you improve that capacity. Which parts of the XC network are the core? What is a justifiable sacrifice to improve capacity? And why is Edinburgh the big problem?
It all comes down to what XC is, and what it should be.
At the moment, XC runs long distance trains, serving end to end intercity journeys. That's it's main market.
It just so happens that these journeys are very long, and they exist on routes where there aren't any semi fast trains to pick up more local stops. So, these intercity fast trains have to stop at a lot of the smaller stations like Chesterfield and Tamworth, when they really shouldn't.
In an ideal world, you'd have XC with big fast intercity trains, with a handful of stops. Kind of like what HS2 will do. Gone are the passengers travelling from Sheffield to Doncaster or York to Leeds, they've been shipped off on six car stopping trains every twenty minutes. They better serve the churn of passengers on those journeys and the voyagers don't get clogged up with commuters making a twenty minute trip.
But, and this is a big but, those stopping trains don't exist yet. There isn't the capacity before HS2 is built, so at the moment you have to deal with XC as it is. So, let's deal with XC as it is now.
LIST OF PRACTICAL REASONS THIS IS A TERRIBLE IDEA.
1. Extending journeys north from Leeds needs to continue for the practical reason that there isn't enough capacity for XC to take up two platforms for 35 minutes every hour. At the moment, the Newcastle-Reading goes via Doncaster as much for capacity reasons in Leeds as connectivity and speed reasons. There isn't capacity for terminating trains without binning something else, and that would devolve into a popularity contest of northern towns. Not a great move.
2. So if you can't terminate reasonably in Leeds, you have to extend to somewhere else.
3. Logically, it follows therefore that you have to terminate somewhere that's not Leeds, but close enough to Leeds that you're not consuming units by sending them way further north for no reason. York would be the logical solution, as you can get there without impacting on the ECML directly, and without conflict. But there a lot of TPE services from Leeds to York already.
So Hull or Scarborough? You need to send it somewhere close, but somewhere easy to extend to. Can't have it crossing the throat twice an hour to go back west to Bradford or Harrogate. So needs to be somewhere east.
You could go for extending it to Hull, but York is a far better service draw, with changing much easier from stations north. You could try Scarborough, but realistically that's a local line and not an intercity route.
It would be really dumb to try sending a voyager to Hull or Scarborough when sending it to York is both closer, and attracts more passengers. Hull and Scarborough need 6*185s twice an hour, not a five car voyager.
4. If you're sending it to terminate at York, congratulations. You've managed to get as far as the ECML strategic study that came out about five years ago. That envisaged a post-HS2 world where both 2tph of XC terminate in the bays at York. So how do we get to where we are now, and why is terminating the units in York still not a great idea pre HS2?
5. HS2 will make journeys that are currently about equal timing and frequency by east and west coast much quicker by one or the other. For example, Edinburgh gains a fast train via the WCML to Curzon Street, and suddenly you don't need to serve Edinburgh to Birmingham journeys via the ECML.
At the moment though, XC serves a lot (probably a majority of journeys not via London) of journeys from Scotland, the North East and Yorkshire to Birmingham and the south west.
If you cut these back to York, suddenly you force people into changing at York. Those journeys that were direct now require a change, so you lose passengers. Yes, on paper your XC services are now less busy and have more space, but you're just replacing long distance passengers with shorter hops, and your train may as well be a semi-fast. That's not a great use for voyagers.
6. In addition, as well as forcing people to change, you force people into other trains. That's not terrible for Edinburgh, but pretty terrible for Newcastle. The Avanti west coast service suddenly becomes the only Scotland to Birmingham service, and becomes exponentially busier. Leeds passengers are forced onto the 1tph TPE service, which looks ready to be binned anyway. Newcastle loses all of its Birmingham services, although still keeps 2tph to Leeds.
All those passengers that previously had direct journeys are now making the change at York, or flying. Not a great look, but also bad for operational reasons. Lots of churn at York means greater dwell times, and the LNER services get much busier with intermediate passengers rather than premium paying London passengers.
7. So by stopping everything at York, you've saved a grand total of max 8 units which are north of York at any given time. That's enough to double eight diagrams. Great, but you've lost more passenger fares than you've gained in shorter trips that are now possible.
8. The problem of oversaturation on the northern ECML is often overstated. Edinburgh, Newcastle and Glasgow combined make up an enormous passenger draw. Currently Edinburgh (and by extension Newcastle and Glasgow) enjoys 2tph to Birmingham, one via Newcastle and Leeds (XC) and one fast via the WCML. This is about right. There is 2tph to Leeds, one extending to Manchester/Liverpool and the other to the south west. That's about right.
While XC going beyond Leeds may make journeys from Leeds to Sheffield more expensive or more difficult, that's not really XC's problem to solve, it should fall with Northern. It does however benefit several cities which don't have a local service. Newcastle and Edinburgh don't have a local TOC to operate semi-fast journeys, they have TPE and XC.
9. This is the perennial problem in a nutshell. XC shouldn't be curtailed at Leeds, short of three enormous cities further north, for the benefit of commuters in Yorkshire and the West Midlands. XC should be an intercity operator, and it just so happens that after HS2, those journeys become properly intercity; fast and segregated. Then, and only then, is it worth pruning XC to maximise semi-fast journey capacity.
Disclaimer, i have lived in Edinburgh for a while, and although I don't use XC for anything, it still represents a service that could only be provided by them, and one that is very well used. By all means prune extensions to smaller cities and towns to focus on the core axis, but that core axis includes Southern Scotland and the North East, the same as it includes Exeter and Plymouth and Southampton. The axis isn't just Birmingham to Leeds, it serves a much bigger region.
Birmingham to Leeds is important, but it's not more or less important than Scotland to Bristol, or Newcastle to Reading. You can't let XC bin the latter and focus on the former without HS2 first.