I'm sorry but you are incorrect that the demand isn't already there- take a drive like I do every day down Camden Valley Way & Cowpasture Rd & you will see how many people travel from this area. Existing suburbs include Hoxton Park, Horningsea Park & Carnes Hill, and Oran Park is being cut up as we speak. Traffic is already hopeless, that is why the 4 laning of Camden Valley Way to Cowpasture Rd is also underway- the station at Leppington would serve a lot of people already there.
I still say the line should be extended to Rossmore (where the proposed storage yards will be), then in the next phase swing around towards Oran Park to serve Camden & Narellan (taking traffic off Narellan Rd & people from Campbelltown station), and then swing north to follow the Northern Rd through Luddenham towards the western line near Penrith. Flat country, easy engineering, and more importantly providing a link between three major CBDs- Liverpool, Campbelltown & Penrith. Unfortunately designers seem to be transfixed on the Sydney CBD being the be all & end all of employment generation... which it isn't.
That's my 'territory' as well. Partly agree that the demand is there from those existing areas, although (apart from Oran Park, which is several Km away) they were developed some years ago before any serious consideration was given to the SW Link, and they are a bit to the north of it rather than surrounding it. Many commuters from those areas that do use rail currently park and ride at either Holsworthy or Warwick Farm, effectively making them quasi-Liverpool stations. My understanding is that an extension of the T-way to the SW Link is also part of the deal, which should give better bus options to it from several of those suburbs.
On the other hand I believe what Grog is saying about the delayed development and sourcing of developers funds is correct. Which is why I'm optimistic about it being completed, particularly since there is a commitment to build all the facilities at Glenfield to enable it to go ahead.
As for extensions, the existing areas beyond Rossmore are undeveloped and probably will remain so for a while yet. Had Badgery's Creek airport been going ahead you would almost certainly have seen an extension up between its two parallel runways to a terminal station, giving a reasonable rail connection with the existing Sydney Airport. As you say, that area is relatively easy to engineer. I doubt the same is true, however, of an Oran Park/Camden line, which passes through somewhat more awkward country. My preference for Camden would be a Glenlee option, although I believe Camdenites would actually resist it as they would fear it might destroy the "English village" feel of the place.
As Minchinyon relates, the SW Link is not all that problematic regarding loading up the City Circle as it really only involves extension of services on lines that are not yet at their full capacity. My preference would have been for a full "Clearways' style operation with all South Line services originating from Leppington and cross-platform transfers, with only a couple of minutes waiting, at Glenfield with Airport and Campbelltown Express Line services. The 'bumpf' produced for the SW LInk however indiacted a mix of South Line and via Revesby services. The latter have somewhat greater growth potential as they can tap into the quad past Revesby and be run into Sydney Terminal if CC capacity is exceeded (although several peak services could be accommodated by going through the Circle, terminating at Central and being stabled during the off peak at Mac'town.)
The same is not true of the NW Link, which would barely be able to handle more than 4 tph without another route being provided through to the city (CBD Link, NW metro or whatever). I know I'm in a minority here in supporting a city Metro, but I see it as the real, long term solution to opening up the capacity at the core of the transport system to accommodate much more patronage on multiple lines, particularly initially from the NW and west.