Leslie is overbuilt and that's before the proposed Canadian Tire HQ will add yet another entrance. Anyone who claims it isn't overbuilt has probably not walked the whole length of the thing and used all of the exits and the comically underused 4 bus bays. It also takes up more than an entire block on the surface. Some of this infrastructure would have been infinitely better off being built at Bessarion to give that station an entrance at each end to properly serve what's east and west of Bessarion. Leslie does not need 4 entrances - all on the same corner of Sheppard & Leslie, too. Sure, adding one entrance is a trivial cost bump in terms of the whole line, but the precedent is dangerously expensive.
It's not though, there's lots that can be done to improve average speed without grade separation. Most important is to give it complete crossing priority - never being subjected to red lights and car traffic stopping to let LRT trains pass. Calgary and Edmonton treat their LRTs like this and they're both mostly at surface. Calgary's average speed is 30 km/h including the slow downtown section. Edmonton, with a downtown tunnel that has very short station spacing, averages 37.
The C-train is mostly separated from car traffic, actually. Highway medians, rail corridors, tunnelling under intersections, tunnelling where it turns, running beside roads, etc., constitute the bulk of the system, despite it mostly running on the 'surface.' An LRT line crossing one road is less complicated to operate effectively than an LRT running in the median of one road while crossing another road, and sometimes crossing another road with a second LRT line in its middle. There is one stretch of the NE C-train in a median ROW, but that road is extremely suburban and the stretch only has like 3 stations. Grade-separation is possible on the surface...the whole point is to remove city streets from the equation, which the C-train does most of the way.
A C-train-type line could have been built along Eglinton or Don Mills (places where a line could run under the road, beside the road, above the road...wherever it fits and will be fast), but would have been difficult along Sheppard without plain tunnelling, and if you're gonna tunnel, you might as well just extend the subway and get some benefits out of the capital expenditure.
As Whoaccio mentioned, the Hiawatha line is sort of similar to the C-train...slower and scenic and touristy downtown, and then it gets a lot faster farther out, when the focus is on getting people from point to point as quickly as possible. Everyone wishing there had been more coordination between local LRT lines and regional GO lines is correct, but it just didn't happen.
Despite your sarcastic rhetoric about Europe, I think we generally agree. Sheppard may be an Avenue, but I don’t see it ever urbanizing in the sense of being a pedestrian-oriented, mixed use street. Densify yes, urbanize no. The street pattern and design in that area simply won’t allow for it. For that reason something similar to Calgary’s light rail lines would be appropriate for that street.
For most of Sheppard, no it won't happen, but it could happen in Agincourt, with minimal effort, even. The city can permit whatever it wants on streets like Hickorynut Drive, Malamute Crescent, Spring Forest Square, or Scotney Grove, but I agree, the odds of anything even remotely approaching 'urban' sprouting in these backyards is pretty slim. Agincourt has loads of potential, though.
What really damns the city's policies on the relationship between transit and Avenues development, though, is that the first substantial implementation of an Avenue is Sheppard West, a street seeing no transit improvements other than the York U Rocket, which doesn't even stop to serve the Avenues development. Finch West was also seeing Avenues-style projects long before the LRT line (though the townhouse complexes along Finch are crappy and not urban).