If the bay was extended then a 6 coach train from Uckfield could turn around. Passengers could swap to East Grinstead trains timed to follow shortly behind. Then an extra 12 coach train from East Grinstead (we have lines that can do 24 trains per hour so I am sure the double track to East Grinstead can handle 6 or 8 per hour in the peak).
The station site at Oxted is extremely constrained topographically, and the existing points to the south are right up against the viaduct. If they can't already (and I don't think they can) then I'm not sure they will ever fit 6x23m Turbostar coaches in the bay.
The only way to get to the bay is via a shunt across the down line. This gets in the way of lots of things and becomes a timetabling constraint, which is a problem if we increase the number of trains through Oxted in the manner you propose, although this is not insurmountable.
The believe the line south of Hurst Green towards East Grinstead has ~8 minute headways and 2 aspect signalling, so is pretty inflexible. At present trains are pathed down it on 10 minute headways (followed by 20 minutes) which helps with reliability - running more than the present 4 tph like this becomes something of a gamble, although again not impossible. The Oxted lines are branch lines, not main lines, and are presently signalled as such.
I don't think there are many upsides to your proposal until we completely run out of options through Croydon, since removing direct trains from Uckfield to London would be politically difficult. It is frustrating that the trains are short and so can't relieve much at East Croydon, but that of course is what the lengthening is for...!
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Personally I am unsure as to why East Grinstead is deserving of so many trains I doubt they are any busire than the Uckfield trains. Maybe some one can produce some details of passenger loadings at Oxted for both the East Grinstead and Uckfield trains.
The provision of so many carriages on the East Grinstead line is very much about providing capacity north of East Croydon in the rush hour.
That said, the high peak ones all get well loaded by Sanderstead (which is a more relevant place to check loadings than Oxted).