The current setup is that rapid transit goes as far as Tamsui station, and the rest of Tamsui to Bali is serviced by a last mile transit. I think the main issue is that Tamsui is really far away from downtown Taipei anyway. Even if you live near Tamsui station, taking the Red Line to downtown Taipei would take 40 minutes. So, any additional time that it takes to get to Tamsui station on the Tamhai LRT only adds to that journey.
Although, what other option is there? Extend the Red Line all the way to Bali or do you wish to extend the Red Line all the way to Taoyuan airport?