Provided they survived the ditching after the engine failure, could mum, dad, and the kiddies swim 3 miles?
For a start most light aircraft starting at cruise speed would make the shore from 3 miles and 1000 feet with a failed engine.
I realise that the proposal isnt perfect but it is much better than the status quo. Not being perfect isnt a reason not to adopt the change. The airspace shown on that map and the outlined in the CASA report is a massive improvement for GA, RPT and the RAAF. It would allow a VFR aircraft to travel via East Maitland and Clarence town at 2000 feet, with terrain in that area at about 600 feet.
On the specific point of going over water in a single engine aircraft, there are also many points in a flight where an engine failure at that exact moment would result in a poor outcome. The incident at Bankstown yesterday shows the that clearly. But we accept that risk when we fly.