It is usually cheaper to operate a diesel locomotive. They are more fuel efficient (converting BTUs to useful work) and have lower maintenance costs, and don't require a fireman. So depending on the actual cost of diesel vs. the oil being used for the steam locomotives (Sumpter was paying $1.95 a while ago), recent repairs and if the fireman's postition is left open - it should lower engine costs quite a bit.
While it is not preferrable to see a diesel on a "steam railroad", the alternative is that the railroad doesn't run at all - creating an economic impact on the local community and possible advertising/marketing issues when service resumes.
While not an ideal situation, it is better than nothing. There is a chance that the Loop will still see good passenger numbers and revenue this season, anything is better than last seasons passenger count.