Yes, vinyl is fast and cheap. Why waste money on a priceless antique locomotive, after all?
Even if they HAVE to use cheap vinyl, there's no reason why the lettering can't reproduce the hand-lettered style. There are computer fonts which were created from hand-lettered railroad equipment, and the FOCTS lettering team has created CAD files of all the car lettering, based on tracing old photos IIRC.
This could easily be done at the cheap-and-fast sign shop, too, since they use the same technology. Stick-on is still cheap looking, but a stick-on in the same style as the other locomotives would at least be visually consistent. (Same thing is done on the 0503 caboose, whose lettering is already peeling off by the way.)
There's really not a good excuse to use off the shelf stick-ons.