Scottie, you are correct that ALARP judgements, with no explicit regulatory requirement, are extremely difficult. Cost does play a key role but in military aviation we do, on occasion, confuse cost with affordability.
In today's parsimonious times the temptation to cancel or remove programs to balance the budget is just too tempting and having been involved with this for many years I will watch, with a heavy heart, to see if it is judged that we cancelled these efforts due to cost benefit analysis (acceptable) or affordability (not acceptable).
Your argument regarding the military applicability of 'TCAS' is well made and, for the senior brass, well rehearsed. With no easy off-the-shelf solution out there your point about other on-board systems is, in my view, also correct. Most of these other systems contribute by increasing SA. For example, Link 16 is far from a collision avoidance system but it really does help if there is a good link picture available and, of course, you may be able to take this SA to war. But again, we do look weak in this regard by not fitting all operational types with this system. The argument to do something with a more military bias is relevant, but this can drift into doing nothing - for peace and war.
ALARP has to be tested in the courts; it may not be a pleasant experience for a number of us but that is how it should be. For others it has been considerably worse. Given our preponderance to call 'ALARP' even when we breach applicable regulations (perhaps not the case here) the MoD sits on particularly poor foundations.