My estimate for the cost of all-LRT solution is somewhat higher.
Let's not forget that Sheppard West from Yonge to the West Don bridge is too narrow for surface LRT. The tunneled section would have to be extended by 1 - 1.5 km even for LRT technology, and a separate bridge might be needed. That adds at least $300 million to the cost of LRT.
Then, the distance from the West Don Bridge to Downsview is about 2.5 km, LRT could be on surface there, and the cost is approx. 75 x 2.5 = $185 million. Plus, the terminus ($25 million?)
The Metrolinx estimate for converting the existing section was $670 million (not $600).
Add $1.1 billion for the section east of Don Mills, and we arrive to about $2.3 billion for LRT that reaches Downsview.
It will be quite difficult to sell an LRT project with that price tag to the public or the local councillors, especially when the first phase (subway-to-LRT conversion) causes a lot of hassle and does not, by itself, produce any transit benefits. Incremental subway extension seems to be more realistic (although Sheppard subway should not be given priority to the detriment of more beneficial projects in other parts of the city).