A short-term alternative to moving the whole line inland (in a tunnel/trench near I-5) would be to do some form of a "Dawlish" - heavy protection of the line along the coast, both sides. As you note, even that, to be effective, would have a price tag near $1B, and would be ugly. Coastal Commission among others would not be amused, but the people with land along the top of the bluff might welcome the spending of public money to not only protect the railroad but also to protect their property from potential landslides (which are NOT the railroad's fault despite what some lawyers might claim if there's a damaging landslide now). Note that the Coastal Commission cannot be ordered around regarding things like this by the Governor: they are an independent agency like the CPUC, and in a sense are also a federal agency since they administer and enforce the federal CZMA as well as state law.

Ultimately, though, it's money and will to do the job. ML doesn't have a lot of either, apparently, for this area. Unfortunately, also, it's well south of the end of area of CAHSR interest, so that little pot of money is unavailable. Ultimately, the money to do something, short- or long-term, in this area, has to be locally generated at least in large part - at least, enough "match" to make permanent works there competitive for larger federal and state programs.

Either that, or give it back to BNSF.