It could have gone up the Lune all the way from Lancaster through Kirkby Lonsdale - indeed lines along most of this route did get built, though they didn't form a direct alternative. Would probably have been less of a struggle gradient-wise as well.
There was a proposal involving a tunnel - through Kendal instead of bypassing it, up Longsleddale, tunnel through to Haweswater and then out to Penrith. If it hadn't been for elitist poets wanting to keep the plebs out of the Lake District then Kendal could have had a proper main-line service from the start instead of having to wait until it expanded far enough that Oxenholme wasn't really "out of town" any more. Again, the gradients probably would have been easier too.
What we ended up with was a half-arsed compromise that didn't really do anything particularly well, in line with standard British practice.
That seems to be what the usual effect of adverse geography was - not to prevent a route being built altogether, but to delay it and/or make it suck. So we got things like Sheffield being 30 years late getting a through route on the Midland, or a choice of wiggly upsy-downsy trans-Pennine routes but no fast direct ones.
One major exception, I think, is Wales. North-to-south connectivity in Wales has always been terrible even before all the closures, and I don't think there was ever any proposal - or at least not a serious one - that would have improved it, not with that fierce grain of SW-NE valleys across the entire country. Carmarthen to Aberystwyth was probably more use than the unbuilt Llangurig connection would have been - although more so if it hadn't been afflicted by the half-arsedness and inherent daftness of the whole M&M idea.
The other sort-of exception is perhaps less obvious because it is related to the overall geography of Britain rather than any one part of it, and to human more than physical geography. It is that we have a network which is highly focussed on getting to and from this big dungheap down in the south-east corner and a lot less useful for movement at right angles to that orientation. To be sure we have lost a lot of lines that once mitigated the situation, but most of them were never really that great compared to what might have been built along pretty much the same alignments if urbanisation had been more evenly distributed.