It's a bit more complex than that, Dale.
To my knowledge no one has said the trail and railroad can't coexist, only that it's more expensive to build the trail if the railroad is in operation (the fence, tunnel safety measures, etc.)
The State DOT seems to be interested in saving construction dollars. The County seems to be concerned that railroad maintenance (mainly costs associated with bridges) and the possibility of needing to build their own shop could get expensive.
This one isn't "trail people" - it's current and future government budgets.
JAC