More seriously though, are QF not shooting themselves in the foot by splitting operations between two airports in the same city? It would certainly limit connecting flights.
The market would be point to point flights at first, focusing on origin and destination traffic, nothing to do with connecting flights. As mentioned above, dozens of cities worldwide have secondary airports like this.
Examples of legacy airlines in similar situations: American Airlines flies to three airports in the NYC area (JFK, LGA, and EWR), and three in the Washington DC area (DCA, IAD, BWI). British Airways flies to three airports in the London area (LHR, LGW, LCY). The fact that AA operates to EWR, or BA to LGW, doesn't impact their hub operations at JFK or LHR, respectively - there is plenty of traffic for everyone, and Sydney will be the same way.
Edit: I should also note that services to MEL or BNE/OOL actually strengthen the hubs there. Western Sydney travellers keen on avoiding Sydney CBD traffic, may find it convenient to have a one-stop itinerary to other destinations from those interestate hubs. Using the US example, this is the reason AA flies to EWR, as New Jersey travellers might choose itineraries such as EWR(Newark)-ORD (Chicago)-> somewhere else. Similarly, western sydney residents might choose to fly WSI-BNE-CNS, or WSI-MEL-HBA, or even WSI-OOL-NRT (JQ).