This (almost identical) idea popped up in Thatcher's days, following a report from Reading University (1976 Hall and Smith "Better Use of Rail Ways") and I recall it gained considerable political and media mileage over the route into Marylebone, and this was in the days of far lower usage. It was shot down in flames only after a considerable campaign demonstrating the immense impracticalities and sheer hogwash regarding costs.
It was the highlight of a campaign run by a Brigadier Angus Dalgleish, who formed the "Railway Conversion League" in the 1950's until his death in 1994. This league had strong links with the IEA (who published this latest, already highly discredited "let the market decide" bit of spittle), which was formed in the 1970's once Thatcher became Tory leader and was driven hard by her monetarist advisors. Their complete inability to comprehend the need to develop homogeneous policy and strategy in a modern, highly inter-dependent society, stems much from US influence. Brig Dalgleish had been one of a large number who long resisted the nationalisation of Britain;s railways, alongside for example, the founding fathers of the Talyllyn preservation group, but with very different agenda!
It can also now be pointed out that, in the figures we have seen anyway, London's commuter TOCs now receive no direct subsidy, although there is NR grant still needed of course. I note that the figures they use (£6 billion per year) include capital investment. No professional project proposal would ever combine operational costs with renewal.enhancement costs in the way they have scurrilously done, certainly not without saying so, and in the form of whole life costs, which they fail even to acknowledge. You can pick holes all over it, but the free market advocates never rest, despite all that has recently happened to the world.