Part of the reason why the Great Western Main Line is still using diesel trains is that the Western Region board made the decision in the 1960s not to go for electrification, on the grounds that it was costly and disruptive (which it is), and that diesel trains offered comparable performance, albeit with higher running costs. In retrospect that decision was wrong, but with the information they had at the time and the financial constraints they were working within, it wasn't completely unreasonable.
The immediate problem on the GWML by 2017 - aside from fuel prices - will be that the HST trains used on that route will be 40 years old and well beyond their designed service life, new engines (which they all have) or no. Electrification can't come too soon, although I have my doubts about whether the new trains will be as nice to travel on as the HST...
There are plenty of non-electrified lines - even quite major ones - in much of Europe, though. With a few exceptions, there are no railway systems that don't use some diesel traction, simply because it will never be cost-effective to electrify every lightly-used branch line and freight siding.