I see both sides of the argument. One of the considerations is that Sydney is a city that has experienced a population explosion and with an increase in population, there is an increase in demand of services, including air travel. Consider all the people living in the Western suburbs who travel across the city whenever they need to fly. Just the fact that they are driving or taking a cab is also adding to the air and noise pollution.
However, a more suitable site should be considered as you say that the current proposed site is in a basin.
Anyhow, since I don't live in Sydney, the decision will not affect me directly, but I hear about the tension that this question is causing some of the local residents.
We live in Melbourne in South Eastern region, where there is no airport, and I would advocate for the need for one. We have to travel 1.5 hours to get to the Tullamarine airport. I have heard of people missing their flights due to traffic congestion.
Curiosity question.......was Tullamarine Airport in place BEFORE you bought your land/house?
If so, you knew the distance/time involved to get there.
Now, you just need to leave earlier, & factor-in traffic delays with a +30 minutes' at least.