Metro North must not be able to acquire property or extend the lease any further west than they currently do. I'd think it would be difficult to have an approach signal at Sparrow followed immediately by a stop signal. Trains seem to have been making record time over the Southern Tier to Binghamton lately. (all 3 that run per week) and something like this could slow them down a bit.
I also heard that Sparrow would be made a power switch at some point. (OT) Rumors are that NY and PA are paying good $$ to weld rail and power switches to Binghamton. Unfortunately, to this point, all this work that has been done seems like a pretty big waste of money.
Right now it is much ado about nothing as there is really no activity in the area anyway, so only the birds will notice any real changes at Sparrow.
I think it may be possible that NJ Transit might not be the perfect, infallible organization that most people assume it is.