The question, once Dawlish is reopened, is what would be the biggest (other) priority in the south west. And I think that a line through Okehampton wouldn't be top of that list.
You're quite right to look at the opportunity costs, tbtc, and in an ideal world you'd drive investment decisions on opportunity costs, BCRs and all kind of other evidence-based analysis.
However, bear with my cynicism: there is a political need to get services restored asap to Dawlish and Plymouth, but there is also a (reasonable?) expectation that there will be more frequent, more destructive storms in future, and without an alternate route, Plymouth and Cornwall (
and yes, Adrian Sanders, even Torbay)will be cut off from the national network. On this basis, there would at any time - let alone ahead of two hard fought elections in 12 months - be a need for a credible alternative route: Okehampton - Tavistock delivers that, as well as opening up new travel options from North Devon.
What would make most sense to me it to use the need for electrification and engineering blockades on the GWR routes to double the LSWR from Exeter to Salisbury, and relay Okehampton to Bere Alston - with some doubling there, too, to ensure that there are sufficient paths as necessary. (And if not up front, then at least ensure that nothing is done to impede the provision of future double tracking - believe this could be a future issue for BordersRail).
Of course, when electrification goes to Penzance, there'd be every reason to do the LSWR routes as well (as far as Basingstoke) with OHLE, as the Southern will at some point come into the 20th century with 25kV AC!
Tobbes