The key word is "expectations"! Like it or not there IS a preference for steam locomotive operations over diesel ones! As has been pointed out many railroad operations use a combination of steam and diesel motive power or in some cases have converted to diesel exclusively relegating their steam locomotives to static displays. Ridership drops immediately following something like this (ex: Eureka Springs & Northern Arkansas RR)
The "doom and gloom" (your words not mine) predictions may be somewhat overstated but I would agree that there will be a significant drop in ridership if diesel power becomes the norm rather than the exception. It will take years before the public's expectations for diesels become the norm.
In all of these posts both for and against I have yet to hear a cost/expense projection made for the coming year or two. The GTL Inc. didn't believe that they could make a profit under the terms of the "new" contract even with three operating steam locomotives (with diesel backup!) capable of pulling 9-car trains loaded with passengers. How is Railstar going to pull it off with ONE steam engine and two diesels (all three of which are lighter than their GTL Inc. predecessors)?
I'm already hearing rumors that the CHS is modifying the contract to make it less onerous to Railstar. While that may be the only logical thing to do at this point it smacks of corruption if true! Why have bids for contracts if there is no intention to follow through with the contract terms?
Personally I think Ron Trottier, Peter Gores and the Railstar group are in for a rough couple of years financially. They are going to have to re-invent the Georgetown Loop Railroad WITH the (help?) of the CHS.
I really don't think the CHS has a clue about how to run a railroad. If they were willing to take a "hands off" approach and let the boys from Railstar do their thing I think that the prospects for a successful run would significantly improve but expecting guys like Bell and Behrens to not butt their noses into matters best left to people with experience is more than one could ask! (Yes, I'm completely biased against those two. No apologies!)
But I digress. The issue of contention here was steam vs diesels and whether ridership would suffer. Simply put: IMHO, in the short term, yes. There are a significant number of people that would choose not to expend the time and effort to ride behind a diesel when they had come to expect steam engines.
In the long run I think that the difference would decrease to the point where it wouldn't severely affect revenues but we are talking in terms of YEARS.
Y'know, I don't mind this discussion nearly as much as you seem to! There are strong feelings on both sides but trying to ridicule people for their passions doesn't solve anything. I'm waiting for Summer so I can enjoy riding behind some trains again (both steam AND diesel!) Only time will tell whether it's going to work out or not. I hope it does.