And yet, bus transit is invariably a dismal experience, simply the worst. I think it's because a bus gives you the worst of both worlds — the stop and go headaches of personal automobiles, and the forced interaction with strangers on trains. (This isn't a real problem on a train, however, because one can usually simply walk away from an unwanted interaction.)
And having bus lanes, which can still be blocked, does not make them cheap light-rail. You also need to upgrade all lights at intersections to allow the bus to override the current signal.
I'm not sure I understand the "terrible capacity" argument. An articulated bus can seat 50-60 people without standing passengers. Are you suggesting that a light rail train holds more? This seems like a solvable problem - just run buses at twice the frequency, no? The point is the right-of-way prevents them from getting stuck in traffic without having to lay expensive off-grade track.
Light rail blows buses away.