The problem with street circuits is that they're limited by geography. I think that the problem with Homebush is that the location was decided long before the layout was considered, so their options were limited from the start.
It was also a political ploy on the part of Nathan Rees. He was an unpopular premier, but unlike Morris Iemma, he wasn't under the thumb of Eddie Obeid - and that meant that one of the most powerful factions in state politics was out for blood. Getting the race at Homebush was a way of placating the dissonant elements of the government long enough for Rees to push through legislation that stopped Obeid from amassing - and abusing - even more power because the race represented a major event for Sydney and New South Wales, and was good for the state's image. Obeid managed to unseat Rees in the end, and I think that Rees endures a relatively unfair political reputation as a result, but it was an important move nonetheless. It didn't help that Kristina Keneally tried to play all of the factions against one another and ended up looking like a puppet of all of them (and most suspect that she was always aligned with Obeid). Rees' actions were a pretty important chapter in the state's modern political history, as they were one of the first steps in getting Obeid before ICAC.
