I'm really not sure on what basis you come to this conclusion. Certainly from travelling on these trains it is not my experience that they empty at Exeter on the way down and become wedged upon calling at Exeter on the way up. Exeter St Davids consistenly has less passenger entry/exits per year than Plymouth.
This is hugely more complicated than that simple statement. Plymouth no longer had enough demand for turboprop regional flights to justify an airport that offered only this. To be honest, virtually nowhere has enough demand to sustain that. Build an airport in the middle of London that could only take turboprop regional flights and it'd suffer from lack of demand let alone somewhere like Devon.
Exeter got there first with the ability to take jet aircraft (primarily due to its out of town location versus Plymouth) and typically you don't need international airports every 30 miles so that was that. Had Plymouth got there first with the facilities required for a proper international airport then I'd imagine Exeter now wouldn't have one. Many of the passengers using Exeter airport - due to the services it offers - originate from West of Exeter.
It's pointless ending the wires at Exeter full stop. If you are going to the trouble of going as far as Exeter, you might as well go as far as Plymouth. If you don't want to go as far as Plymouth, there is little point going as far as Exeter. Remember, Plymouth is much better equipped to handle terminating services than Exeter and has a full-scale TMD nearby too. We'd quite quickly run out of space at Exeter.
Plus, the political opposition would be significant which is why I went into the transport link things. I don't think the lack of a motorway or a cruddy regional airport is a particular issue for the city but the public perception is that it is. A reduction in the quality of rail service the city has would be the straw that broke the camels back both politically and in terms of business west of Exeter. Plymouth needs - and in my opinion currently (almost, if we ignore the overcrowding issues on Voyagers which you think don't exist as only 2 people ever use a train from Plymouth, as they all live in Exeter, a city of half the population

) receives a good quality rail service.
My view isn't 'woe is Plymouth, we need electric trains'. Quite the opposite - I don't think it's economically worthwhile to provide electric trains from Plymouth to Paddington. But neither do I think it's worth providing them from Exeter. Or Westbury. I'd rather the money was spent on other things. Like perhaps ridding long distance FGW services of the 150's which currently infest them.
It would seem the powers that be have a similar viewpoint as electrification to Exeter seems not to even be on the radar let alone an actual plan.