I can see reasons to be uninterested in overpasses: If you dig an underpass for the road, it can be prone to flooding. If you elevate the ROW over the roads, it divides the neighborhood visually especially if you do it on a fill (In JP a century ago they called the RR ROW the Chinese Wall, and I assume they put the new one in the trench so taht even though you can't cross it it's less noisy and less visible. On posts, it can be noisy. None of it looks very pretty to most people, and the spaces under bridges can easily get dark, dirty, and scary.
I grew up within sight of hte Needham line at the Arboretum end of Fairview Street. Used to watch the Budd cars with my mom at rush hour, back when the land curved down from the Arb and slightly back up to the track. It was really just a country RR in the park for a few hundred yards then, where now there's the big embankment so you don't see the track. My parents bought the house in 1974 and when I was a kid and the line closed they thought it would come back as subway, so either that was still the early story or it had stuck in the neighbors' minds. Was there ever any doubt that something would come back? For a few years they did nothing at all on the line, and we just walked on the overgrown tracks up to where they ended near Bussey Bridge, looked for date nails, and so on, because it was neither a railroad nor a construction site, just tracks with weeds and a no visible connection to any possible moving train.
It's worth remembering that the commuter rail is much cheaper to build than rapid transit, and it has a much higher farebox ratio (fares cover more of the costs). The equipment is interchangeable with all other CR lines in Mass and in many other cities. It's much closer to off the shelf when they buy it, and it can be easily sold when they want to replace it. I suppose it could be leased to other agencies. If they electrify any lines, they can use existing coaches with electric locomotives. Trespassers ahve to get hit to die, because there is no third rail. Stations don't need turnstiles and staff, at least currently. So beefing up existing commuter rail is not actually a bad option at all. (And from where I'm sitting in Santiago de Chile, where the metro runs 6-car trains every 3 minutes or so at noon and about every 100 seconds at rush hour, as close at the signals will let then, and the passengers are barely off the platform when the next train comes in, I'm not at all sure that any Boston subway extension would attract enough volume to really justify the expense of ROW, stations, specialized equipment, etc., at least while oil is cheapish and cars are universal.)
Even with all the stops the Needham line is a lot faster way downtown than the Orange line and a bus, or than the orange line would be if it were extended. Plus, there's a class and personal preference factor: some people will ride the CR and won't ride the OL (just like some people would ride the GL in JP but won't ride the bus). CR has a different feel and a different reputation. It may make good sense to leave the line as commuter rail, possibly with double track and greater frequency, which is almost like having an express track on the subway for people boarding south of Forest Hills. The T could consider a fare system that includes commuter rail with the other stuff for single tickets not just passes, as in Salt Lake City and some other places.