Toronto's transit landscape has fundamentally changed since the Sheppard Line was introduced.
As someone upthread reminded us, the Sheppard Subway was meant to link North York Centre and Scarborough Centre, both of which were planned to have formidable downtown cores. Of course, that never materialized, and few people are under any illusion that those former boroughs will have a sizeable downtown core. We also know that very few trips are made between these two points.
Furthermore, we will have several new lines bleeding peak hour/peak point ridership from the Sheppard Subway. This includes the Relief Line, GO RER and eventually the Line 2 extension. Ridership for the Sheppard Subway extension when Line 2, Relief Line and GO RER weren't planned to connect, was estimated at around 7,000 pphpd at Yonge. It might not even be half of that with all these new connections to the Sheppard Line bleeding ridership away (my guesstimation). I'm not even confident it would have the ridership to support LRT at this point (the LRT would be subject to the same downward pressures on ridership).
The best thing for Sheppard at the moment would be BRT linking Yonge, Relief Line, RER and Line 2, with the BRT terminating somewhere near the Toronto Zoo. In the future we might be able to built a Sheppard Subway extension on the surface and inexpensively, but that's not something I envision happening soon.