I cannot believe that the restoration would have been more expensive than what has been built in it's place??
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What is the railway companies attitude towards railway heritage??
I don't know, it depends in how bad a condition the building is though. As in quite a few cases it is better to spend a larger amount of money now and be covered for years than spend small amounts maintaining a crumbling building, but keep having to go back to it every couple of years to fix it.
The railways are there to serve people. Whilst it is always nice to see old buildings preserved, it has to be functional, safe, modern and effective too. I'm sure SWT and NR have better things to spend money on than maintaining an old building for heritage's sake, however nice it may be. Of course, there are times when new buildings are significantly worse (see Newport, South Wales), but generally speaking it is the best move to take the opportunity for new development whilst you can.