I like your thinking. But a few points here.....
The point of the Moodie extension was to help the feds, with the thousands of public servants and military personnel who now have to commute to the Carling campus. Whether explict or not, the fed contribution is sort of linked to making it easier for the largest rejigging of public servants in Ottawa in decades. They aren't going to take kindly to targeting a direct priority for the federal government. And all over literally one stop that has actual operational benefits for OC Transpo.
Politically, Confederation West does go through and services liberal ridings too. It's not entirely about benefiting conservative leaning suburbs. The Riverside South extension on the other hand.....
You also really aren't going to save a billion bucks by cutting Moodie and Riverside South. There's only one way to cut a billion. And that's to make cuts in Orleans. If the city wants to play the political game, Riverside South is a nice addition. Heck, if Watson was smart, he could use this opportunity as a shakedown to get a fully funded twin tracked and electrified Trillium.