How is this different from rush hour everywhere?
As a furriner WRT to Virgin Rail, I wonder from afar - rush hour is always going to be packed, regardless of the transport mechanism. In fact there are multiple transport studies that basically say that when you expand capacity in one method or route, soon that capacity will be filled as more people choose that method or route. We've all seen that as well, and we can see historically that when a new highway or rail line goes in, people move to new housing to take advantage.
The other aspect is purely practical. Rush hour traffic (of whatever kind) may be four to 10 times as busy as the other 22 or 20 hours of the day. Providing infrastructure to handle any arbitrary peak traffic situation can thus cost you four times to 10 times as much as what's required to handle the overall mean traffic demand, which obviously will increase prices unless some magical government agency subsidizes (which is just hiding and time shifting the cost). This is a delicate balance, which every transport agency ever has had to deal with.
So, bottom line, how much are you willing to pay either in fares or taxes to provide a permanent 'always a seat available' capability?