If anything, Sheppard is an example of how not enough money was spent. It would probably have much higher ridership if built to SCC as originally planned.
Spending more money to improve the system doesn't mean the efficiency of the system will increase. After all, none of the TTC's bus or streetcar routes even come close to making a profit.
I don't disagree with you. In fact, I would be very in favour of a $5 fare (90 minute) if it boosted service and gave us expansion.
An expanded Sheppard, as originally intended, would likely not have been any better off on an operations standpoint than the current Sheppard is (i.e. no evidence shows ridership would triple for double the length -- TTC and Metrolinx numbers both considered here).
As such, the fare increase when Sheppard launched would have been larger than it was.
Eglinton, both TTC and Metrolinx numbers, indicate that a fare boost or tax increase would be required on launch day to cover the added operational expenses.
Is it worth it? Yes! Just remember this when the TTC wants a $50M/year (2008 dollars) boost to operations subsidies or farebox revenue to cover the added costs.
IMO, the best way to improve transportation in Toronto is to get the users to pay for it -- meaning road tolls to cover highway/street costs and 100% operations from the farebox. I would couple this with a matching drop in property taxes.
Incidentally, TTC already covers much of their own policing and is now looking to cover their own paramedic costs. Special constables come out of the TTC budget -- not the general policing budget like road enforcement does.