Think it's a fantasy, and not one that is likely to happen any time soon (even the Oxford CC report concedes as much).
Why not? Well, many reasons. First, capacity immediately north of Oxford station (even if the North Cotswolds line is eventually redoubled between Charlbury and Wolvercote junction, by way of Yarnton, where the Witney line used to branch off) is not great.
Second, some bits of the line have been built on. Not least in Witney itself. Where the original Witney station (later just used for goods) was is now a big Sainsbury's (and a much needed series of car parks), and where the later Witney station was is an industrial estate. And while the way that Witney has developed means that the later station site, at least, is not particularly convenient for much of the town... and then you get to look at the locations of all the other stations on the former line - mostly some distance, even some miles, from the towns or villages they purported to serve (of which Witney, with a population of just over 20,000 is by far the largest)- it's easy to see why it closed... Brize Norton airbase or not
(statement of interest: I live in (central) Witney, and commute by bus (Stagecoach Gold) to Oxford, and then from there by train daily.... A railway line would be great, really it would, as the traffic on the A40, and over the Swinford (5 pence!) toll bridge can be, at best, variable, and at worst, exceptionally slow-moving. But really I don't see the revival of the old railway line as a goer. I'd even say that the construction of an entirely new railway line on a different route (that didn't go to join the North Cotswolds line) would be more feasible (and not necessarily much more expensive) that that...
I do think the transport infrastructure of the area needs some things sorted out. An extra-extra urban Park and Ride carpark at Witney for Oxford, perhaps would or could go some way to reducing congestion on the A40 (OCC has considered this, at least). POSSIBLY a railbus link to Hanborough and/or Finstock (with a proper service at the latter) might be a another consideration. Widening (or adding a bus lane) to some of the A40 would be another thing. But I think re-opening the railway is a long way down the list, either in terms of practicalities or desired effects. How frequent would a service on the branch line be? (Bicester Town is hardly well served by trains at present)? If the original line had run through, as planned, to Gloucester, it might conceivably still be with us.....
At least, at the present time, we have (for a small, rural town) an excellent, frequent - and entirely unsubsidised, bus service to Oxford (as many as 9 buses an hour in the peak hour, and even 3 an hour on Sunday daytime, with night buses till after 1am Sun-Thurs, and after 3am Fri and Sat).
That OCC report seems rather wide of the mark in lots of things. Apart from the remodelling of Oxford station, about the only new project that it mentions that I could envisage happening might be the opening of a "Wantage Parkway" (a.k.a. Wantage and Grove ) station opening (on the site of the former Wantage Road station)....although I imagine there'd be some reluctance to overcome there, too.