There are lots of diesel commuter services that would have been cost prohibitive had electrification been required for their inception. Dallas, Portland, Seattle, Sonoma are all examples of DMU operations with 'Metro' characteristics. Not to mention a sizeable proportion of Great Britain's regional and local trains.
The original incarnation of UP was not that different from other services that were conceived as low-cost startups..... it assumed that there was a supply of venerable Budd RDC's available.
After the private sector proposal fell apart, and ML was given the design mandate, they landed on a carbon copy of the highly successful airport service in Oslo Norway, which was implemented on a route that was already electrified. It would have been ludicrous to try and build an electrified infrastructure just for UP - given a) it would have been hugely wasteful to design and build a power supply infrastructure sized for only UP..... the infrasructure had to anticipate a full GO electrification and b) it would have been likewise to push electrification into USRC signalling and trackage before the full GO electrification was designed. So diesel was a very reasonable choice for UP and followed abundant precedent and best practice for that.
I would ask a somewhat different question: Show me a place in North America where a niche transit need was identified, and met, before the general transit needs of the same locality were properly addressed. Wynne was the culprit: her promise to have UPE running in time for the Pan Am games shifted the priority of GTS from improving the Georgetown GO service to getting UPE in place at all cost. The Kitchener Line ought to have been the horse, and UP the cart, but it all got balled up from there.
- Paul