Yes splitting the Northern line like that is not at all helpful; there was a plan a few years back to smooth the flow by making all Edgeware trains go via Bank and High Barnet via Charing Cross (or vice-versa, I forget), but it seems to have withered on the vine.
As far as I am aware TfL still desperately wants to do this -- the Northern line is one of the busiest on the system and the switching south of Camden Town is a chokepoint.
The problem is that if that were done today, Camden Town would instantly become a major interchange station. It's a small, crowded station and in no way could cope with the added load.
Ten years ago there was a plan to rebuild it a massive new station along a whole block of the high street, but it had too much opposition. The last I heard is that they are going forward with a plan that's less disruptive at street-level. No construction has started yet, so check back in a decade.
