Reopening doesn't need to mean following the old route. If you skirt the southern edge of Wheatley, the amount of demolition required would be relatively minimal. It's the vague concept of reopening that matters, not the precise historical accuracy of the route.
Without any other pressures, there's no reason to reopen the line. However, if there's to be a sustainable way of continuing to expand Oxford as a centre for technology-focused companies then there's going to need to be some way to house all the staff who'll be working there. If new homes are to be built, the least disagreeable way to do it for everyone is to focus new development around railways. If, for instance, the old route through Wheatley were used, then the scope to add homes without them being those horrible edge-of-town developments which end up being car-dependent is limited. With the railway to the south, the station could be the focal point of the new housing, with reasonably high densities and pedestrian/cyclist routes designed to encourage people to walk to the station and town centre rather than driving there and needing to park. That's just how Shawfair on the Borders Railway is designed, as a new suburban district of Edinburgh focused around the railway station. It's also what's happening to a lesser extent at Armadale on the Airdrie-Bathgate route. When you're reopening a line which provides a commuter route to a city with high-value jobs, it's really not the hardest thing in the world to fill up the area around the stations with lots of homes.
Also, Sustrans isn't the sort of organisation that would block the reopening or opening of a railway line. If the southern end of Thame saw massive house building focused around the railway, it would be easy to provide state-of-the-art cycle paths to replace any sections which would have to be lost to the railway. Outside of built-up areas, the cycle tracks can be shifted to the side, as the amount of land take needed is minimal. Since more land than is actually needed for two tracks ends up needing to be bought anyway, putting in a cycle path at the side of the new railway line wouldn't be a challenge.
The Oxford-Princes Risborough route also has an advantage in terms of being suitable for development in that there would be commuter flows in both directions, just like the Airdrie-Bathgate route. That means good loadings on services in both directions, and providing the option helps with families where the two partners work in the two separate cities. As Oxford gets stronger, the chances of families having employment locations split this way increases, which increases the value of places where it is equally possible to commute to both. Housing developments to the west and north of Oxford wouldn't benefit from the same effect, as commuting to London would be a much more time-consuming and expensive process.
