This is one I thing I have doubts about too.
Despite the significant improvements on "rural" routes in Wales, the Cardiff - Swansea service still has around the same number seats an hour as it did at privatisation (compared to the almost tenfold increase in Holyhead - Cardiff, the forthcoming doubling of the Cambrian, the reinstated services to Fishguard...).
Running services via the District line means missing out on the Cardiff - Swansea trade and also the Swansea - West Wales trade. Yes, it'd save a few minutes, but then so would avoiding Birmingham on XC services.
It is seperate markets. Pembrokeshire - Swansea works as a stand alone service, and there should be no question of reducing that frequency (in fact, once we have express Cardiff services, increasing SWA - Carmarthen to 2tph should be done). In the survey done a few years ago in the Fishguard area, the majority surveyed wanted to go to Cardiff or London, and Bristol was as popular a destonation as Carmarthen. By sending all Pembrokeshire trains via Swansea, you are losing some of the (larger) market to Cardiff to the roads, and even more of the market for travel into England.
In the long-run, I think there should be an hourly service over the Swansea district line to try and capture some of the south-west-Wales to England/Cardiff market and (as said above) half-hourly south-west-Wales to Swansea trains. IF (and only if) there was a hourly express service over the Swansea district line, you may be able to have all trains (except the London - Carmarthen/Pembs services) arriving at Swansea terminate there. East from Swansea, I think there should be an hourly Swanline, the current hourly Manchesters and Londons, plus an hourly semi-fast (Neath, Port Talbot, Pyle, Bridgend, Cardiff) to Bristol (replacing the Cardiff - Tauntons between Cardiff and Bristol). That's the long-run though, for now I just want the current capability of the SDL preserved. To help with that I had an idea for a single 158 working a 07:56 FGH - CDF, 10:57 CDF - FGH, 13:30 FGH - CDF and 17:54 CDF - FGH. These would have all been over the SDL with the only calling points east of Carmarthen being Llanelli, Port Talbot, Bridgend and of course Cardiff and the 158 would have been obtained by getting the DVTs onto WAG2 and using that 175 to kick a 150 off the franchised Holyhead - Cardiffs with that 150 kicking a 158 off Maesteg.
However, now that the Cambrian curciut is going to swallow up all the 158s I think getting the mark2s in service is the only way of finding a suitable train to run that diagram. No matter what you say about the mark2s, they are more suitable for regional express work than a suburban unit (class 150).