Its going to be very interesting to see what happens when people who are used to travelling from Reading, Swindon, Newbury, Didcot and Oxford in some comfort on HSTs, especially the ones who go first class in some luxury, discover that there are no more HST short commuter workings, almost half of the IEPs wont be stopping at Reading (and I suspect the rest will be pick up/set down for people going west only in the peaks) and instead they get 8 or 12 car high density units with rock hard cushions (the circle line trains have softer cushions) and first class seats with identical rock hard 2+2 seats to standard class.
I'm pretty sure that the 165/6s were wider than most to take advantage of the GW loading gauge. The 387s are distinctly narrower than the 319s were inside so going from 3+2 to 2+2 wont give quite as much room as people think and the 1st class seats on the 387s are certainly far narrower than 166 first class seats.
Methinks the local MPs will have some interesting mailbags, especially as the fare won't go down. Meanwhile, once you lot get the 387s, I won't have to get one into London every morning anymore and will have the dubious delights of Siemens finest instead.
If you actually bothered to look at the timetable, you would find that most peak HSTs between London and Oxford run to and from the Cotswold Line. Five out of six southbound HSTs from Oxford before 9am start further west and the high-peak 17.22, 17.49 and 18.22 out of Paddington to Oxford and beyond are also HSTs.
So there will still be a lot of Class 800s running up and down in the peaks, given that the Cotswold Line will still be getting its through trains (at least an hourly 800 each way all day plus its peak extras), so I think the Oxford first class passengers (and there are probably rather more of them than from other places you mention) will probably do just fine.
And there will be 10-car Class800 Cotswold Line peak services. FGW has said as much for some time and repeated this in its localised press release on Monday.
I should also point out that something looking like the current state of affairs at Oxford dates back all the way to, er, the middle of the last decade, when FGW supplanted Thames Trains and instead of there being a couple of their HSTs each way to and from Hereford in the peaks, 180s and HSTs started to appear on the fasts all day in place of not very luxurious Turbos - which were needed elsewhere anyway to handle growth nearer to London.
Oxford commuters will indeed have a choice of using Chiltern but given the rather faster run on offer to Paddington with electrics and the onward travel options from Paddington that Crossrail will create - as opposed to the Bakerloo or a walk down the road to Baker Street to get anywhere else from Marylebone - I think GWR will do just fine for custom.
Newbury passengers will probably not notice much difference, as they are used to the odd express set appearing among Turbos already, the Swindon and Didcot passengers will be happy to get on trains that aren't busy already when they get to their stations, so they can get a seat and, as we know, Reading passengers will get on just about anything that runs non-stop between there and Paddington...
The Turbos are a few centimetres wider - you can hardly notice the difference, especially with the 3+2 seats - and please don't tell me there is anything like the same circulating and standing space on one of these (165) - and that is what I call a high-density unit, not 2+2 seats with armrests...
http://www.mattypsrailwaypics.com/uploads/9/3/9/5/9395206/2234612_orig.jpg
compared to this (365)
https://c2.staticflickr.com/4/3855/14870103045_b194ac95b1_b.jpg
or this (387)
https://c2.staticflickr.com/8/7562/15959622647_088af797a5_b.jpg