I suppose it means
something, just not the massive deal that you people are making it out to be.
- more expensive to construct
I disagree. Less stations, etc. It'd be a straight line between them with a few stops here and there (Sydney, Campbelltown, Goulburn, Canberra, Albury, Tullamarine, Melbourne). It'd be like a train from Paris to Berlin - lots of traffic between the two, but the only difference is that there'd be less stops between. Meaning lesser construction costs, less maintainance costs and greater fuel efficiency.
The Sydney-Melbourne route is a very busy one.
- greater speed advantage to planes
The link I provided shows that the time delay isn't that massive, and in some cases, favours trains.
Plus the emissions difference is absolutely gigantic. (90% cut)
And anyway, as I said, fewer stops would mean a faster time. That's not a complicated science.
- less people to travel on it
It's a busy route so I don't think that'll be a problem. In fact, wiki sez "The Melbourne-Sydney route is the world’s fourth busiest air route in both passenger numbers and the number of flights (variable figure of 800 flights per week)." And anyway who cares? This point can easily be made for any transport option, including air travel. The solution would be to downsize either the size of the carriages or the frequency. We don't run 747's between Sydney-Melbourne, after all.
- more potential for a fault to take the system down
How exactly? Faults usually arrive thanks to complexity right? This route wouldn't really be all that complex and fewer stops means lesser complexity. And if you're trying to make the point that trains have lesser reliability or safety than planes, well...yeah...
- bigger transmission losses (e.g. it needs more electricity)
I think that's a function of distance, rather than density. But yes, that would be a problem. But it doesn't exactly favour the plane, which is an incredibly wasteful and energy inefficient form of transport that pumps its joy right into the upper atmosphere where it does the most damage!