I heard that one about the Bandon line too, way back. But CIE, for their part, certainly didn't take it seriously.
Re the "troubles" in the 1910/20s, I don't think it would have prolonged the life of any line. Some years ago I went through the GSR and MGWR archives in detail and all the early closures followed a period of accountants super-analysing all the traffic receipts, coal and staff costs. In fact, I've a pile of this stuff right in front of me now, as I attempt to continue writing "Rails Through Connemara"... musty smelling oul shtuff.... The reality was that the lines concerned were hopelessly uneconomic and the Government not only had not money to prop them up, but no political will. The savings made by not having to compensate, say, the DSER, would have been a drop in the ocean. The stuff I have here now involve detailed investigations into the Passage line and the Muskerry system, the Kinsale and Macroom lines, and the Clifden, Achill and Killala branches. Even had the tooth fairy relaid their track (most needed it), the GSR knew full well that losses would continue to mount.
Many of these lines, arguably, should never have been built in the first place. Many were constructed with "Balfour money" - this in itself an indication of poor potential for remuneration, as the major companies would already have built them of their own volition if they foresaw any potential profit there. The reality was that there was never a chance of the worst examples anyway ever turning a penny, and after construction it proved indeed to be the case.