Of bloody course the NSEWL still breaks down la, you think the
lines run by magic? It is damn true that the NSEWL has become more
reliable than few years back.. And by your first line dont you
concede that SBST screws up as much as SMRT does?
If by your logic then SBST shall not handle the bus svcs of so
many places as well then. It's hence better for them to stay off
any SMRT territory and mind their own business first, esp
Sembawang-Yishun, given how they can't even manange their own
express/airport svcs properly. 
Give the SMRT territory to any other firm, be it TT or GA. Not
SBST.
I didn't say SBST handle rail better than SMRT but at least on
par with SMRT, if not better.
That's for rail. It's different for buses. SBST handled buses
better than SMRT. Despite the bigger scale of economies it has
served in the past before GCM, their service standards and quality
are better and maintain it over the years. SMRT despite given a few
places, managed it badly after taken over TIBS, from badly
maintained buses, to infrequent frequencies to lack of new bus
services to poor overall management, especially under the old
management. They simply not interested in operating buses and have
been thinking about ditching it's bus operations for years. They
only improve recently when the government decides to implement GCM
and actually supports GCM as a stepping board to provide bus
services without incurring bus assets ownership to reduce the
losses in its bus operations. 
So it's all about business decisions for both companies, no need
to compare who should take over which mode of transport for which
company. SBST is interested in bus and rail operations and it made
profits out of both. SMRT is more interested in rail operations as
it helps to reap huge profits for it, but not so for its loss
making taxi and bus operations. And now the government wants it to
fully concentrate to improve on its rail operations. 
You are still living in the era of the past. Now is already not
which bus company restricted within its boundaries anymore due to
GCM. Who can give the best price in bidding, who gets to operate
 the place. I don't see why SBST can't take over Yishun - Sembawang,
if they can offer a reasonable bid. Just like how TT and GA took
over some of SBST services. As long as there are bus operators
willing to operate bus services and operate at a reasonable bid, it
doesn't matter who is the operator. More importantly to the
commuters is that fares don't increase, service standards
improve. 
I do agree that both companies won't collapse because they are
all GLCs.