The issue with Durham Bus Station isn't just the size, it's the location.
It's a fair trek to anything that's worth visiting, you've got to cross a bridge and walk up a hill to get to the few shops that are left in the city centre.
I know when I need to go shopping in Durham, I change and catch one of the Indigo services as it's then only a short walk to the shops from Millennium Place
I personally think they would be better off building a new larger bus station on the outskirts of Durham (perhaps near Sniperley P&R), then having some services that extend into the centre of Durham, stopping at Milburngate, but with express services bypassing it.
RE: Go North East: Upcoming Service Changes v2