Agree with ICTS not being a failure per se. LIM wasn't necessary, but is also not nearly so crippling as people act like. Frankly, if that was the only issue there is absolutely nothing stopping a conventionally propelled train using the ICTS third + fourth rail power system. Even the cost of grade separation is overblown the SRT would inevitably have received incremental grade separation for the sake of road traffic at Lawrence and Ellesmere. Scarborough Centre station was looking more like what we got than any of the early at grade versions by the time ICTS was chosen. The prospect of less than full grade separation on extensions IS seriously tempting, but as was mentioned, no cost savings on the order of what grade separation can feasibly do was going to get major projects built between 1985 and 2000. I honestly think the best case scenario would be an at grade extension to Centennial, without a highway crossing, being built around the time of the Spadina/Harbourfront projects.
More than anything the SRTs reputation was crippled by a genuinely bad transfer at Kennedy which was never going to be seen as anything other than a forced linear transfer. Given everything that has happened since, I almost fear that a CLRV based SRT would have made it even harder to get popular support for LRT in Toronto. Quite frankly, it wasn't the cost differential of light metro vs LRT that caused the zeitgeist to shift away from above grade construction in hydro and rail rights of way, Vancouver and the SRT itself being good examples of the actual cost difference being marginal. Frankly, UTDC and the Government of Ontario proper had decent arguments for the advantages of high floors and automation.
Criticizing ICTS does nothing to further the cause of reexaming those corridors now. Though I grant that the image of genuinely minimalist surface private right of way streetcar routes in suburban Toronto is hugely attractive, the SRT was never going to be that, it was always too much a subway extension; the Etobicoke RT probably WAS the best chance for such a thing, and it's death wasn't truly caused by ICTS or light metro, but the conditions that led to no meaningful construction happening from the SRTs opening until the Sheppard line was built.
Quite frankly, if I wanted to put the blame for the lack suburban low cost LRT in Toronto in a single place it likely IS UTDC, but no DIRECTLY the development of a light metro system. Had GO-ALRT been a genuinely common technology with UTDCs urban medium capacity system (be that a light metro, or something streetcar derived) I think there would have been a much better chance of things coming together sensibly. The real problem was, in other words, that the moment GO-ALRT became a bespoke system incompatible with any of the heavy rail, metro, streetcar OR light metro networks ANY coherence in suburban network planning fell apart.
To play the speculative history game a bit, consider how things might have played out if, without changing anything else, GO-ALRT were a properly common technology with the SRT. It's not hard to argue that this would have speeded construction of the Picering - Whitby section that opened in 1988, and once that line is in place and compatible, closing the gap via UTSC and Centennial is exactly the kind of project that could have gained wider support than anything else in the era. Similarly, even the early historical Sheppard Subway studies speak to the desirability of GO-ALRT compatibility; It would be hard to shift Lastman's support to a Finch corridor route in my view, but building for SRT compatibility looks a lot more attractive with the start of ALRT, the SRT beginning to form a network rather than being an overgrown peoplemover and, one hopes, a better sense from the public that elevated construction isn't the end of the ******* world. If nothing else I have to think that any government that still had the least bit of official intent to build the ALRT northern line would fund the Sheppard line as something incompatible with an existing ALRT eastern project. In short, it's not that a light metro project was a bad idea for Toronto, it's that we had three competing visions of it (ICTS, ALRT and conventional but high end LRT) which managed to kill each other.