I could understand them making this change once Crossrail is open - i.e. there'll probably be less demand for services from Paddington into central London once there's a Class 345 every few minutes capable of carrying large volumes.
But I can't understand why they'd make it now (with no replacement at the Paddington end, as far as I could see)?
Or does Battersea Park take priority?
I'm all for diverting services into areas of new housing - and sometimes you've got to over-provide in the early years to ensure that a service is attractive from day one - but I'd have thought that the demand of Battersea Park residents was for a service into central London, rather than one to Lewisham etc? (no disrespect intended to Lewisham, I should add, just that this move seems to be more about "give Battersea Park a service" rather than "give Battersea Park a service that will be well used")
Paddington has lost a lot of bus frequency over the last four years or so; the 159 has gone entirely, having not long since replaced the 15, the 7 and 23 have suffered peak hour cuts and now the 436 disappears from the area. The 36 gets a marginal increase in the peaks as a miserly replacement, but with those buses coming through from Queen's Park there may not be much room for waiting passengers at Paddington. This is certainly the first time in the sixty or so years I've followed these services that there have been no scheduled services starting at Paddington in the peaks to go down the Edgware Road to Marble Arch and beyond. The Circle Line way to Victoria is not only more expensive than the bus, but will often take much longer when you take frequency and getting up and down to the platforms into account.
I think you're right about 'giving Battersea Park a service' rather than something geared to the requirements of BP's residents, but will they really want to go to Vauxhall to try to cram on to Vic Line trains? Lewisham, as you say, is as far from the desired destination of BP-landers as BP is to Lewisham's!
I still feel, though, that there is a political element to these new facilities dating from Boris Johnson's tenure as Mayor and having cosy little meetings with property developers whose main aim is to achieve sky-high prices well beyond the scope of ordinary Londoners.