The culture for the sport from juniors through to seniors must be in place for sustainability. At the steelworks where I worked, we had a motto 'Do It Right The First Time' even if it meant waiting, like waiting for the swell to catch a wave surfing.
Sydney has a population of 5 million and has 9 teams = 555,555 per team, Melbourne has a population of 4 million and has 1 team = 4,000,000 per team because the culture for the sport ain't there.
However, it may appear as though Sydney teams are cannibalising each other and not feeling the full force of their final wins, one team one city, because since 1982 when the market was opened to teams outside of Sydney, Brisbane and Melbourne are top of the list
https://forums.leagueunlimited.com/threads/final-wins.472429
What would happen if there was one team representing Sydney? The surplus of players who can play first grade and miss out would probably go to other teams outside of Sydney such as Melbourne, Brisbane, Canberra, etc. rather than settle for a lower reputation league. Or maybe not.
What if teams outside of Sydney were at full strength and do not take the surplus from Sydney?
Then expansion talks get aired but without my comment in the opening paragraph, they become mercenary teams. And as the Australian Rugby League and Australian Super League war found, the soul of the game takes precedence over the prostitution of the game.