That's exactly it. Originally they were able to keep things nice and tidy, with each corridor having its own set of numbers. As they've added more and more trains, the numbering system became a bit looser, and with more and more overlap. The 15 minute service on the Lakeshore Lines was the last straw, and required a whole new set of numbers.
By going to 4-digit IDs, they can keep things nice and tidy again, and each corridor has its own set of unique IDs. And there's the added benefit of not having to worry about any duplication with any of CN's or CP's existing train IDs, as they use 3-digit ones.
It's not, actually. The Canadians are identified as 001 and 002 in CN's systems.