http://transportationnation.org/2012/06/14/ny-mta-chief-says...
Also interesting: "The Regional Plan Association, which held the conference at which Lhota spoke, and other advocacy groups have expressed support for through-running—at least until Gateway Tunnel gets built."
I.e., they want to be more efficient, but only as a stopgap measure until the tunnel is built.
(Also check out Market Urbanism's blog post on the topic: http://webcache.googleusercontent.com/search?q=cache:ycccmpt... )
So while this might get us a few percent increase in the number of trains for now, at the cost of a few hundred million to build out third rails in NJ (or catenaries in LIRR areas where NJ transit trains might be routed), it doesn't change the fundamental infrastructure issue given the growth of mass transit in the NYC metro area.