This is an interesting discussion and it hinges upon something we have seen and may see a lot more of in the future, at what point does it make sense to cut your losses and move on? For example, with major weather events, does it make sense to rebuild towns and homes in flood prone areas, even if obviously the people living there likely have roots there and may not want to leave, especially if their family has lived their for many years. We don't always make decisions based on pure economics (for example, Amtrak service to places where it makes little economic sense), and there is a lot to be said for that, but where do you draw the line? To the people living in Churchill, that is their home and I assume someplace they have ties to, to someone living elsewhere it looks like a group of people clinging on rather than facing reality, and there is no real 'right' answer there IMO (though I personally might think one is better than the other). Even companies make decisions not based on economics (though that has changed a lot), the UP rebuilding a big boy or other steam programs are not necessarily going to be economic decisions (I am sure the paper pushers would like nothing more than to get rid of it), companies donating to charitable causes likely doesn't pan out economically directly (ie, for every dollar they donate, they can say "I get back 5 in good will economic activity"), but they still do it for a variety of reasons.
The decisions are never cut and dried, and with something like this, apparently there are other reasons other than economics to rebuild the line, whether it is political (though 900 people in a remote community doesn't seem to be generating much political capital) or nostalgia or based in the idea of helping people live where they wish. Kind of funny, really, that rebuilding the line to Churchill is probably similar to our hobby with trains, especially when looked at from the viewpoint of our spouses/loved ones/friends/family, economically doesn't make much sense to buy stuff that likely won't be worth much not long after we purchase it, but our 'others' put up with that knowing it makes us happy (or keeps us in our basement and train rooms and not bothering them *lol* [said tongue in cheek]), lots of things in life make no sense logically