Gallop still doesn't explain how the continued existence of the Phoenix has a negative impact on the growth of the league. It's not like we, I don't know, are eating into another team's fan base to start a new team at the expense of an established one in a completely different market or something...
Just to pick a hypothetical example of a process which might negatively affect the growth of the league...
If there is this hypothetical Sydney club waiting in the wings then the only way to get it up and running is to loose an existing club because under the current agreement they can't afford to pay the cap of 11 teams. If ratings don't pick up then the next TV deal will be lower than the current one so they are looking at ways to artificially bolstering ratings. They see ooh derbys look good (although even they don't rate high enough) lets make every fudgeing game a derby and therefore every game will be exciting.
Also, they should read up on some economics - the law of diminishing marginal returns. Too many derbies might mean that no one cares about any derbies. Also, remember the state the Heart were in before the Man City sugar daddies bailed them out? Yeah, an extra Sydney team could and probably will be just like that all over again.
If we do get booted for a new Sydney team then I hope like fudge they struggle for crouds and fold in a few years. And I hope that whatever comes out of the ruins of the A League has a spot in it for the Phoenix. Rising from the ashes to soar again is what we do!