Given the success Vermont has had with the Ethan Allen Express and the Vermonter, I think it's a decent idea. Bennington is the fifth-largest municipality in the state (after Burlington and two suburbs plus Rutland), and Manchester has decent tourist/ski traffic. Compared to the current route, using the southern route for the second frequency trades Saratoga Springs and Fort Edwards (both of which already have two a day) and diminutive Castleton for Mechanicsville, Bennington, and Manchester. That puts basically every population center of any significance in Vermont within a few miles of an Amtrak stop. Having two trains a day will be good for Rutland, Burlington, and intermediate stops as well.
Two trains also gives them more flexibility for an extension to Essex Junction once the Vermonter returns to Montreal. Currently, the southbound EAE would be timed well for that extension, but the northbound would be several hours too late. With two trains, you could have 6 or 7 am and 10 am southbound departures from Burlington, arriving NYP at 2/3pm and 6pm, and northbound departures at noon and 2 reaching Burlington at 8 and 10 pm. (Or substitute that later northbound for a morning departure arriving in the early afternoon.)
As far as track work, where are you seeing 10 mph track? ORM indicates a mixture of 25 and 40 mph on the Freight Subdivision and the Freight Main Line, and 30 mph on the VR. That shouldn't require a massive amount of work to support 59 mph passenger speeds.