I'm sure there were good reasons for sticking with steel. Can think of several, including:

* Looks like the old one - important in the middle of an older (by California standards) beach community with million-$$ houses/views and a Coastal Commission.
* Cor-Ten+paint is sort of belt & suspenders, but does address the climate and location. Plus, how long had it been since the old bridge had even a bit of paint on it? And it lasted 80+ years?
* Concrete at that location would have been a non-starter. In addition to the cost, there would be the view - OMG a freeway bridge! For a really permanent solution, concrete would have been better, but would have been very expensive - a custom, aesthetically-pleasing design would have been needed.
* Timing - suspect strongly that the total job will be finished sooner using steel, and that's an issue in a beachfront (park) environment where you want to be done and out of there before the high season starts again.

La Selva Beach is at about the edge of the weekend beach traffic zone. Beach usage there is somewhat seasonal. Doing something similar at Capitola or San Lorenzo River would be much more tricky, since the high season there is all year. When I lived in Santa Cruz (many years ago), it seemed like 1/2 of San Jose tried to drive over the hill every weekend, even more in the summer. If I had to do something out of town, I did it on weekends so I was driving oppposite direction to the traffic. Visiting the area now, it's clear that the situation hasn't changed a lot, except for more traffic.

Again many years ago, there were thoughts of running diesel LRVs between Santa Cruz and Watsonville to avoid Highway 1 traffic. Despite some improvements on the highway since then, traffic isn't any better - more people live there now and of course drive more, and the weekend traffic hasn't declined any. I suspect that in the long run even a slow train (say, up to 40 mph where the track allows) might equal or beat bus times at peak periods. Presumably that is being studied or eventually will be, again.