I don't see the point of building a new streetcar line on Dufferin for the sake of building a streetcar line on Dufferin. The 29 is a pain, sure, but the TTC simply won't build new revenue trackage without a right-of-way. Indeed, except a one-block section of the St. Clair streetcar in 1980, all new revenue streetcar trackage was built in ROWs - the Harbourfront Line, the new Exhibition Loop and Fleet Street, Spadina Line, the Cherry Street spur now underway.
The 29 is slow and unreliable, but somehow I'd argue it works simply because of the number of buses the TTC dumps on that route (I've never had to wait more than 10 minutes for a Dufferin Bus, while I've been left stewing waiting 20-30 minutes for other north-south routes like 7 Bathurst) , and there's too much through traffic through Dufferin Station that would inconvenience too many people with a new transfer. Not only would you need a streetcar loop, you'd also need a bus loop as Dufferin doesn't suddenly become irrelevant north of Bloor or Galleria Mall. Buses from the north would have to loop via Dufferin Mall or College-Sheridan-Dundas (both not unheard of for unscheduled short turns, but good luck manking either a permanent loop). Then you'd have an overlap of streetcar and bus.
As I wrote recently, Dufferin is interesting because except the tracks from King/Queen to the Exhbition (special events, short-turns and detours only), and a short jog between Lappin and Hallam, it never had streetcar service. And not a through bus service until 1962.
I'm not against extending streetcar tracks on Dufferin to Dundas or College, as it would be very useful for detours and the such (and a better route for the 522 Dundas-Exhibition that will make a return this year), but not in the name of a new Dufferin streetcar.