The problem with a trench is that it will act as a physical barrier dividing the areas on either side and preventing vehicles and pedestrians from crossing Eglinton from side streets - think Allen Expressway on a narrower scale. With an at-grade median guideway you would at least allow "right-in, right-out" vehicle movements and allow pedestrians to access Eglinton.
As an alternative to tunnelling, an elevated guideway provides the most freedom of movement for both vehicles and pedestrians in the immediate area.
An elevated line will never happen unless it's for very short segments and forced due to topography.
Think Allan? The scale means it'd be nothing like the Allan - not as wide, not as deep, not as loud, more crossings, etc. A trench wouldn't affect pedestrians in the slightest. It'd be decked over by streets (no streets would even be closed...Eglinton intersects relatively few, anyway - look at a map). Also remember: Transit City's lines are being sold as urban revitalizing tonics, with claims and promises as alluring as your typical 19th century patent medicine scam. Galleries, cafes, Parisian boulevards, smiling children...this has as much chance of coming true as patent medicines had a chance of curing cancer (or even 'that tired feeling'), but if even a tiny bit of redevelopment occurs, the trench could be decked over in places, with stores or houses or parkettes or anything, increasing the number of crossing points, decreasing noise, etc. Parkettes or other green roof deck segments would make great Section 37 fodder. You probably counldn't trench the whole thing, but not trenching through Richview and parts of Eglinton East is simply idiotic (par for the course in this city, though). Also, every line needs a few open-air segments for scenery, to reduce monotony, and to keep track off where you are.
Running transit down the middle of the street has negatives even aside from the lack of grade-separation and the slower speeds and certainty of train/car accidents. One can say it's "accessible" in the middle of the road but it's farther from the sidewalk than even a regular bus is. You need to cross traffic to get to the platforms, meaning people will be darting back and forth across Eglinton, particularly if multi-car trains are used. This isn't a big problem on a street like Spadina, but darting across Eglinton East is, well, keep the ambulances on standby!
