yorksrob is on the right track as it were...

There is no reason why heritage lines should be treated differently to the TOC's. They require subsidies for most of their services, so then should heritage line public services to the nearest main line towns. Swanage - Bournemouth, Minehead - Taunton/Bristol for example. Either with their own units or, a TOC running through to the terminus. Early and late trains won't interfere with the steam timetable and their are 4 loops at Swanage and 4 or 5 at Minehead. The termini count as loops because a DMU can tuck in to the bay while a steam train departs from the main platform.
These and other lines must look outward not inward, pulling up the drawbridge and repelling all invaders.
As a matter of interest, how much of the network would remain if all subsidies were withdrawn? Has any such study been done?
Public service overrides financial concerns or at least it should. Trains mostly don't pay, accept that and run them anyway, with the subsidies.