The advantage of routing Kildare line services via Phoenix Park tunnel is that passengers do not have to change trains/trams/buses to reach their destination, and people do not like change! Now if Luas had been laid to the Irish standard rather than the European standard gauge, then there would have been the possibility of running both heavy rail and light rail trains on the same track i.e. Tyne & Wear Metro and Sheffield Supertram. Just think how different things could be if main line trains could return to Broadstone and Harcourt Street.
Returning to my first point about change, transport planners do not seem to have caught on to this fact. In the UK there is a huge debate going on about HS2 but people are missing the point that, if you want to travel from Birmingham to Paris, then you will have to change trains, not least because they don't run to/from the same station. St Pancras and Euston may be next door, but you will still have to physically get out of one train, go from one station to then next and then board the second train. But I digress, we were talking about Dublin suburban services!
Stephen