There isn’t a case. It was studied following the Dawlish washout nearly a decade ago. The report showed that the BCR for a line via Okehampton was ‘very poor’, as was the case for any other option for diverting the line. Given that the existing line needs to be retained to access Torbay (and of course Dawlish and Teignmouth), it seems to me a very sensible use of money to spend a rather smaller amount on keeping it open, rather than trying to build a new railway through a national park.
That, of course, is what has been done.
The report is here (too much to quote)
It‘s a fairly defeatist attitude for the railway if we must expect an existing railway to be closed in an unplanned manner often enough to require a whole new railway to be built. (rather than doing something to stop it being closed in the first place)