Josh:
I think you are essentially correct. As business declined in the 1960's engines were set aside when flue time expired. Some engines, such as 482 and 489 came down from Salida in 1956 with fairly fresh overhauls on them. When the flue time ran out, they were parked.
It is entirely too easy to study this to death. My opinion is that the retirements of certain engines were based on when work was needed, budget matters and what needed the least amount of work to get back in service. In about 1962-3 487 got new tires, flues, etc. Why it instead of something else? Well, perhaps because it was running and 482 wasn't. The longer an engine sits, the more parts get liberated off it for other engines. The policy of "what's easiest and cheapest" always wins the battle over "well that was a better engine than this one".
The deal about "good engines versus bad engines" is a very opinionated one. Talk to 10 engineers and you will find 10 different opinions. I liked engines that others didn't and didn't care for others that others liked. Mr Coker liked 488, I didn't. It's throttle wouldn't stay set, its valve gear wasn't square, it just didn't feel right to me. I loved 489. It did everything right for me. It was square as a die, great throttle, rode well, etc etc.
Also opinions on motive power varied from location to location. Alamosa guys had no opinion on Mudhens. They never ran them there. Durango guys didn't care for them because they were used when a 470 wasn't available. Montrose guys loved Mudhens. Everyone appeared to like 480's. Fireman liked 490's because they steamed so well. While 470's rode better than enything else, most guys preferred to fire bigger engines than the 470's. It was a very subjective thing, that we could debate forever.