Yes, it should run directly to the Humber campus, at least to Humber College Blvd. Woodbine and the airport are obvious next steps (not Malton).
I don't really think I'd like to see it continue along Finch East. Finch East is a totally functional route...why risk breaking what isn't broken by 'fixing' it with 'improved' transit? Unlike Finch West, Finch East is not crippled by traffic and has little to no prospects of Avenueization (Finch East has a very limited potential ridership base). Finch East has 3 areas of any consequence and all 3 are right at intersections that will/should get higher order transit (Don Mills, Warden, McCowan). Finch East does use up a lot of buses/drivers, but articulated buses could reduce this, as well as improvements to other lines that 39ers would gladly switch to if only service was improved on them (Sheppard subway, GO lines, etc.).
The hydro corridor vs in street running is a tricky issue, but I think I have to pick running it in the street over the hydro corridor (and not just because the corridor should be reserved for a GO-like rail line across the city
, though if such a line was built, they could keep the Finch West bus).
The hydro corridor could really slash travel times but only if it takes full advantage of the corridor and bypasses some intersections with slight grade separations (trenching wouldn't be too expensive) and if walking times are not too long (people will walk a few blocks towards a 'hidden' subway station but they won't do the same for surface transit). They'd need to build a bridge over the reservoir, or go around it. Running in the street would be much better for the Dufferin-Yonge segment, but having it connect with Finch station in the corridor would be better...perhaps it could run up Duplex or Beecroft.
Of course, it could always run in the hydro corridor as far as Finch West station, then return to the street for the stretch over to Yonge...part of it can be on street and part in the corridor since it's not like the majority are going to be riding the whole length of it; it can be treated as two distinct segments. Looking at a map again, it could run in the corridor as far as Dufferin before dropping back down into the street.