Some of you are missing the point. Distance is but one factor, but I'd suggest that feeling a link to the team is probably more important. Gosford and northern Sydney are 2 distinct places, you're not going to be able to set up a team which appeals to both as "their" local team. That's just reality.
The same goes for Sydney as a whole. The north/south divide works to a point, but at some stage as you travel west people no longer consider themselves north or south of the harbour but west. I'd even suggest that in the last 10 years or so it's further divided into north west and south west. So you're not going to sell a Northern Sydney team to someone living at Seven Hills just because they are north of the line of Sydney Harbour, nothing to do with how far they have to drive, they just won't identify with it as "their" team.
All JVs have to be big enough to appeal to enough people and small enough to appeal to people as their local team. The proposed Northern Sydney JV of Manly, Norths, Warringah and Gordon fits this bill, as does the hoped for Parra, Eastwood, Penrith & Wests JV. I also think that Easts, Rand & SD make a logical fit to cover the south-eastern region, notwithstanding Randwick seeming to prefer a stand-alone option.
We want to retain the people we have by having joint ventures wherever possible to maximise the supporter and sponsor base - remember at the grounds that these matches will be played there won't be a barbeque or club bar, the main way for clubs to make money is supporter merchanise. RL, A-League and AFL clubs confront this reality as well, it's not unique to 3T.
We also want to attract people who may have an interest in supporting rugby and while diehards might not blink at driving from North Sydney to Gosford, most people won't. That sort of strategy is setting yourself up to fail before you start.