Well it step in the right direction but of course there are trade offs.
First, it will be more expensive to operate as the line will not be able to be automated as Metrolinx has said it wants to.
Second, the line will not be able to run as frequently. The line, like all automated systems, could run about every 90 seconds if eventually needed but due to running on the street and wanting to avoid "crunching" of trains like on Queen the highest frequency will be every 3 minutes. That is certainly still high frequency but it still reduces potential capacity by 50%. It may not be needed now but you don't build capacity for present needs but what will be needed 50 years from now.
Third, the trains will be limited to probably 2 cars per train as opposed to the potential 3 if the entire line was grade separated.
Fourth, it will be slower. Not by much but that will depend greatly on the number of stations and the original TC has far to many to make it true rapid transit. There should only be stations at major intersections averaging about one per km give or take.
There is also the "problem" of what to do with the SRT. The tiny little conversion is some how going to take 4 years and cost a staggering $1.2 billion which only god knows how. Apparently the biggest expense and difficulties is that all the stations have to have their roof raised in order to accomodate the overhead catenary. That expense could be completely eliminated by using Bombardier new catenary-free LRT cars now in service in Europe. Of course they could save themselves a cool billion by simply improving the GO rail underpass , put in the heating mechanisms, and run the new MK11 SkyTrain cars.
By just leaving and upgrading the current SkyTrain line and building the section mentioned at at grade that will dave $2 billion. $650 million for Sheppard as McGuinty agreed and $1.3 billion for high capacity LRT expansion to the airport. Vancouver is building it's total grade separated new 11km SkyTrain Evergreen Line including a 1 km tunnel for $1.4 billion, there is no reason why Toronto couldn't do the same.