Hugh,
It is interesting that despite the ending of steam locomotive practice, the related technology had enough momentum to continue advancing even though it could not advance enough to keep up with dieselization. You make a good point that there is technology that could be retrofitted to the D&S locomotives to make them run cleaner. Certainly cost is an issue, but any remedy will be costly.
Perhaps the bigger issue is whether it is appropriate to bring an historic locomotive up to modern standards. I guess that depends on the mission statement of the D&S. Is that mission to merely operate a recreational railroad, or to operate a steam powered recreational railroad. Or is the mission to operate a recreational railroad as an historically accurate rendition of the D&RGW in the general timeframe of the end of commercial operation by that company?
RK