When they did the analysis, the number of riders on the at-grade section would overwhelm the system.  It had to be 1) fully grade-separated from Kennedy to Yonge, or 2) they had to force a transfer at Kennedy and get all the people onto the B-D line, or 3) they need a different transit line to serve STC.
If you meant elevated - the problem was that connecting the SRT to Eglinton was viewed as a Ford idea, and at the time the goal of transit in Toronto was to defeat Ford, and not to provide good transit.