Sorry for being a quote whore but:
People consider it natural that stops on the subway are less frequent than they would be on a bus route, but I suspect people will fight like hell not to lose their local bus stop when it's replaced with a streetcar.
Stop spacing of 400m-500m would mean only about 1/3 of the stops are eliminated, but on a long route like Eglinton that could still mean a few hundred people fight it. The St. Clair SOS campaign was probably really only fought by a core group of a few tens/dozens of people, so only a small number of people might cause problems/delays. Especially, as you say, when they find out their bus will be replaced by "evil" downtown streetcars.
Kipling from Humber College to Steeles West would've been the wiser choice.
There's some stops on Sheppard between Warden and Pharmacy that I've never seen a passenger pick-up/drop-off for. Stops like these can go.
Yes, Kipling would be a pretty good choice. So would Wilson/Albion, so would Lawrence East, perhaps Dufferin or Bathurst, etc. Transit City should have targeted corridors like these, which are ideal for streetcars/LRT, first.
As for those rarely used mid-block stops, every suface route has a few of them. When they're taken into account, suburban routes already have a practical stop spacing of 400m...the stops that will be removed for Transit City are stops that no one uses anyway.
Why not have the TC routes stop twice every concession block, and have local buses supplant this express service? This could combine speed and accessibility.
The Yonge subway/97 bus setup proves that this could work. An average 1km stop spacing would still be extremely accessible to the vast majority of people, and would speed up travel for everyone. Transit is one place where we must provide for the majority first and at least 90% of people would benefit handsomely by ~800m-1km stop spacing.