So people get a direct journey at a cheaper rate, and that's a bad thing?
However a cheaper journey in one corridor wouldn't kill off the general concept of a cross modal ticket.
I can't recall the details of the Tyne & Wear bus fares (it was a long time ago).
but in terms of currrent operator fare levels in GM;
typical pricing is around £3.50 for a single, £4.50 for a day rider, and £15 for a weekly rider. Day and weekily rider tickets are confined to services of one particular operator.
On that basis; regular travellers are strongly dissuaded from ever buying a single ticket. So a regular cross-operator journey usually involves buying two weekly rider tickets. So a passenger who can make a regular connecting trip on a single operator is £15 week better off than one who has to connect to a service on another operator. The case of a cross-modal trip simply extends the principle.
But there is also a significant perceptual inhibition (or nudge if you like). Having paid out £15 for a weekly ticket, riders are notably less likely to switch modes - even if there is no bus service from the same operator running to their potential destination. This may not be 'rational'; but consumer choices rarely are. Having bought a weekly rider ticket up front, I am strongly predisposed to travel by that operator's services to the exclusion of other transport modes or other operators. So, given the choice of going where I most want to go (but paying for an extra ticket), and going somewhere else (which happens to be accessible on my weekly ticket), I will tend to do the latter, even if the former would otherwise be my highest preference trip.
Hence a non-predatory fare level might be:
around £1.60 for a single, £4.00 for a day rider, and £18 for a weekly rider; but where the weekly and day rider also provides unlimited cross-operator and partial cross-mode travel.
(essentially these are the current fares levels for Edinburgh)