What you don't appreciate is that I'm suggesting new segregated metro lines be restricted to the higher density inner and middle ring suburbs, which would have to be underground and would be cheaper to build and operate than the existing heavy rail. Because of their relatively short distance, seating is not a priority.
How about light rail? This could be segregated light rail. While metro-style rail does work best in high density areas like you mention, you still seem to be advocating the metro-suburban devide, and nowhere else in the world is setting out to do that.
Rodd Staples proposed a metro in the dense parts and that proposal was wildly unpopular.
However, for longer distance services to the outer suburbs, then I support the expansion of the existing heavy rail network, which will require further track amplification through the inner city suburbs, mostly underground, such as an express tunnel from Granville to the CBD which I have mentioned earlier. This could support an express rail link from Badgerys Creek Airport to the CBD via Parramatta in addition to an express link to the CBD via the East Hills Line. An express tunnel on the Western Line corridor could potentially be extended via the previously proposed City Relief Line to interchange with the metro at Barangaroo. An underground extension of the East Hills Line from Wolli Creek Junction to the CBD may also be required in the longer term for south west services. This mirrors what is happening with London's Crossrail. Many of the major cities in Europe have U-Bahns and S-Bahns, including Paris with the metro and RER. It's horses for courses. I don't agree with the North West Rail Link being metro operation BTW, but that's history now.
I don't fully get this but most of the major cities in Europe and Asia were heavily developed before the railways. The metros in these cities mostly run in the old parts, the ones heavily developed before the railways, and in most major cities that have both metro and suburban rail, it was metro that came first. This was the case, for example, in London, Paris and Berlin.
There is still scope to improve reliability and speed of the current network with a goal of reducing the operating patterns to preferably a single pattern on selected lines, cutting the fat from the current timetable and introducing ATO with upgraded signalling. Dispensing with guards and introducing driver only operation would also greatly reduce costs. The latest and planned rolling stock is capable of much higher speeds and acceleration/deceleration characteristics.
What operating patterns? What fat from the timetable?
Also, dispensing with guards also seems worrying. It cound create or worsen some problems with what happens on board trains. Sydney trains have a very high capacity per train.