From a purely technical POV, short-turning at Finch does make sense, if there must be a short turn. If memory serves me correctly, Finch buses pour in a plurality of Finch station riders but Finch riders won't be riding the Yonge extension. Also, relatively few YRT riders will actually be funnelled to Steeles station since the subway extension will be replacing Viva Blue. Also also, Steeles buses pour in lots of riders, but many Steeles East riders, in particular, are extremely likely to switch to other rapid transit lines given improvements on these lines, like Stouffville and Richmond Hill GO (should they build a station at Steeles), because so many Steeles East riders are taking the 53 rather long distances just to get to the subway because there's no other transit options.
Really, what's the big deal about short-turning at Finch instead of Steeles? Currently, there's not that many jobs at Steeles or along the extension and connecting routes to Seneca and York U are reached by Finch, so few reverse commuters are affected at all. Even if rush hour frequency is "reduced" to 4 minutes instead of the X seconds it'll be south of Finch, that's still an improvement over getting stuck in traffic on Yonge...traffic partially caused by the buses themselves. Honestly, the TTC risks losing riders if Finch station goes from being an almost sure-seat station to being as crowded as a spot like St. Clair, where seats are hopeless. The TTC depends on a ridership base that wants to take transit and likes doing so. Messing with our goodwill is like thinking about eating a golden egg-laying goose...there's definitely room in some areas for traffic to get a lot worse.
edit - oh, and the TTC report suggests that Steeles station will indeed be north of the intersection, probably with the southern exit right at Steeles (based on a projection of 1998m between Finch and Steeles stations, and since Finch station is north of Finch).
