That would be a great solution as well, given that the Sheppard trains right now are only 4 cars long. It also would not require the current line to ever be shut down.
From what I understand, the reason why an LRT was pushed for Sheppard east of Don Mills was that it could run on the street, which isn't strictly necessary - especially on a road that isn't known for its active streetscape. Perhaps an elevated structure in the median with nimbler, OL-style trains could do the trick.
Elevated structure? Isn't the city looking for ways to tear down the elevated sections of the Gardiner?