That was the same crowd that pulled out one of the tracks across the Yolo Bypass to save maintenance money (or was that rail for the Sunset too?). The State had to pay for reinstalling it some years later so the Capitol Corridor service could be expanded and made reliable.
In the early 1990s, UP had acquired WP and was routing most Overland Route traffic to the Bay Area that way, so the SP line had little traffic. Looked at that way, the track removal made short-term sense - and when you're mainly worried about where tomorrow's payroll is coming from (as was the case at SP), short-term is the only thinking there is. There was no future in the SP line east of Sacramento as long as there was no active UP connection any more, so there was no need to maintain double track everywhere. The traffic growth potential was on the Sunset line. Given that, I suspect the main reason the Donner line didn't have more 2nd track pulled out was simple bureaucratic intertia at 1 Market Street. Or maybe they ran out of money to spend on the Sunset, too.
Interesting that now the tables are turned (compared to SP in the 1990s) with UP routing most traffic over Donner with only a few trains and BNSF trackage rights on the old WP. However, since UP still does own both routes, they can adjust train routing if demand for Donner gets too heavy. That should keep traffic within reason on Donner so returning double track to the summit itself won't be needed.
Frankly, I think the situation can be blamed on the aborted SP-Santa Fe merger. When it was broken up by ICC order, Santa Fe kept all the SP assets except the railroad itself, and the railroad was a marginal operation. If you look carefully at the SP company prior to that, you would probably find that the other assets cross-subsidized the railroad heavily. The current incarnation of the land company is
Catellus. Anyway, with nothing left but a railroad, and not one in great shape at that, SP was not going to remain independent for long. The merger with D&RGW just postponed the inevitable for a little while. The Borg eventually assimilated it all.