It is a good plan, I will give it that. But it will unquestionably make James (and by extension, Upper James) a matter of discussion for transit improvement. The street is already a key auto corridor, for better or worse, and a significant number of bus routes already use James for getting to MacNab Terminal and Hunter St GO. I would say shut it down to cars and make it one transit-only lane in each direction (with wider sidewalks and other pedestrian improvements), but realistically speaking, It's going to bring the A-Line into the fold. You won't be able to cram all downtown buses, plus cars and trucks, onto James without some infrastructure. Making West Harbour the hub is still the right move, but adding the LRT into the fold will push James to the limit.
Without diverting discussion too much, what to do on James street is a difficult question unto itself, but it affects regional travel to and from Hamilton. And I can say that I'm not the only one who has concerns about whether we can implement any sort of A-Line, so this is not just pure speculation: Surface RT is not a very practical option. Transit-only lanes will compromise automobiles, even if it's only on James for all the feeder routes. But, if you grade-separate to avoid that (or even stomach the lane reduction and just use LRT for trunk capacity), you'd have to go all-in and climb the escarpment to intercept those mountain routes before they go down the Jolley Cut. So it's either a half-measure in the core that will see major pushback, or an extremely expensive option we go all-in on. Or, of course, do nothing- but as I've said, that won't do for very long.