I agree entirely! I think that the fact that it would be relatively simple to introduce a regular service from Exeter to Okehampton, given that it already runs on summer Sundays, and yet it hasn't been says an awful lot about the lack of pent up demand! Even as a diversionary route, I suspect that a bus from Tiverton to Newton A would be a faster way to get to Plymouth, as the road is much more direct. Connecting Tavistock might make sense, but the location of the station in Plymouth, plus the huge cost vs a major upgrade to the bus service seems to make it an easy decision not to do that either.
In the long term I would love to see a 125 or 140 mph Haldon base tunnel type solution to Dawlish, not only for the long distance services, but also to make rail much more competitive with road for commuting from Torbay into Exeter, but realistically the current solution of further upgrades along the coast is the most sensible
OK, of we build a DAL or base tunnel or other new line in Devon there's one major flaw, that being you need a new line from London to at least Reading, if not further to be able to have much more than the existing services.
That serverly limits the ability to improve capacity before several 10's of billions of pounds of new lines.
That's unlikely to be justified on 2tph between London and Exeter and the number of passengers which it would generate.
Conversely Crossrail 2 creates new paths or of Waterloo which (given constraints South of Guildford and South of Basingstoke) have fairly limited places to go.
Therefore by some redoubling of the WofE line you could create 2tph between Waterloo and Plymouth.
That's a few billion (2 maybe 3) and it doubles the frequency between Plymouth and Exeter.
It also provides better connectivity between Southern England and the West Country, which realises capacity on the line between Reading and Exeter, as people from Southampton, Salisbury, Portsmouth, Woking, etc don't have to travel via Reading/Westbury.
It would also be possible to have one of the services from Waterloo to be quick enough that it would either be a comparable journey time from Waterloo to Exeter/Plymouth as traveling to Paddington to catch the fast service. Even if it wasn't comparable it could be timed so as to allow an earlier arrival time (i.e. by leaving at, say, 12:30 it would beat the 13:00 to Exeter).
Add to that the improved links between Exeter Central, Honiton and the like with Plymouth, not least by providing a direct service.
Overall it would result in more people traveling between London/the South and the South West and between East and West Devon (potentially 4tph between London and Plymouth). This would then likely result in it being a better business case to build a new line than if the line wasn't built.
Unless someone can explain to me how we can improve step by step without spending significant amounts of money, then of the two (a new direct line through Devon rather than a reopening through Okehampton) then the route through Okehampton is more likely to happen.