Plainspeak a lot of what you're saying is good value. In an ideal world, the train is preferable to the plane for a number of routes, such as the city-centre to city-centre ones you mention.
However, in order to get our rail system up to an acceptable standard is an almost impossible task. The West Coast Route modernisation was originally planned to cost £3bn.....it will now cost £10bn and will not deliver the increase in performance (140mph) that was promised when the project was launched.
If the government were serious about rail travel they would bite the bullet and build at least 2 new high speed rail lines....one from London to the North (straight up the middle with branches to Manchester, York, Newcastle etc.) and one from London to the South West.
It is highly indicative of their spinlessness that both these concepts have been proposed by two private companies, the first by Virgin and the second by First Great Western. The first died becuase of the changing franchising regime which you support which basically makes investment in the railways pointless, as before your investment matures it gets taken away from you. The second died because the Strategic Rail Authority (one of the many organisations that now claims to run our railways) angrily told FGW that strategic planning was not their responsibility (even though FGW were willing to fund the project entirely on their own). Where is the government leadership? Nowhere. The government is sh*t scared of running the railways because the benefits will not bear fruit before the next election (or even the election after that). So they have cobbled together Network Rail which cannot raise money (who'd invest in a not-for-profit company!?) and will have political difficulty in getting money from the government.
Your point about the CTRL taking up existing transport corridor is accepted......however this is a consequence of us living in an increasingly crowded island. The same cannot be said of Northern France, where steel lines have effectively been drawn across an unspoilt landscape. There was also significant opposition to the CTRL from people in Ashford as they realised that high speed trains would be travelling through their back gardens.
Also, the catchment area of city-centre to city-centre services is limited. Anyone who has tried to cross London between Kings Cross and Waterloo with heavy luggage will tell you that Eurostar is a tricky option for a trip to Paris. This may change when the Stratford station opens on the CTRL but this is the exception rather than the rule. The market for city-centre services is actually limited - Eurostar envisaged the equivalent of 2 747s leaving London every hour for Paris.
You therefore have to increase the speed of the connections and provide train services from different parts of the country rather than London. This has been proved a non-started as the Regional Eurostars have never entered service (save being leased to GNER). A high speed (186mph) railway from London to Manchester would make Manchester-Paris competitive....but it would require massive investment.
So, for the forseeable future, the total cost is in favour of air travel. Although it is more costly in environmental terms, that's the only area where it is more expensive. The aircraft are there. The infrastructure is there. The market is there. The cost to expand LHR would be minimal compared to building hundreds of miles of high speed rail lines. The future of Britain as a trading nation depends on it!