Feels like, if the line was only Leeds - Knaresborough then it'd have been electrified years ago, possibly at the same time as the Leeds - Ilkley/Shipley lines - it'd have been a shortish simple route that could interwork with the current 333-operated routes going out of the low numbered platforms at Leeds towards Armley. You could run fully electric trains on London services etc. Fast accelerating EMUs could allow new stations (e.g. near Headingley Stadium).
However, the existence of rural section east of Knaresborough makes things more complicated - electrification would mean the additional costs required for the quiet section ("twenty seven passengers per train" etc).
Personally, I'd be fine with four (longer, electrified) trains per hour on the Leeds - Knottingley section (two fast, two slow), with one shortish DMU doing a Harrogate - York shuttle. Connections should be fine at Harrogate, given the frequency on the Horsforth side.
Obviously there are some people who travel from east of Knaresborough to south/west of Harrogate (I've done so myself a couple of times), but the two halves of the route are very different and I feel that the "one size fits all" approach means that passengers on the Horsforth side are missing out on improvements for the sake of retaining a through service for the handful of people travelling long distance.