I completely agree that the line should really be split in order to allow for both neighborhoods to get service. However, this being the T, I am sure that they will not do this for the simple fact that the thought of extending Light Rail services goes against the T's corporate culture which is abandon LR as much as possible. Splitting the line would also require a more intricate headway timing in order to make sure that tehre was even service to both areas and to avoid a glut in the Central Subway.
Also, would the Medford line really be another line? I can reasonably see the T running the Medford line as an extension of a trunkated E-Arborway line (Ie: Heath-Medford Hillside) with the line terminating at Heath.