First, regarding the San Pedro Red Car, I agree it would be a shame if this were lost. With its 4-day-per-week schedule it is nothing more than a tourist attraction, also catering to cruise ship passengers while in port there. That a street is being realigned and that the tracks will sit in the middle of the street would inevitably lead to safety concerns. The light rail and streetcars that do street running now even experience accidents with motor vehicles. With the incompatibility of the antique cars running on this line, it may never be re-cleared to run again. At very least, San Pedro should be looking at modern streetcars that can run within the street and better absorb the impact of a crash. The question of course would then be whether it is worth the expense of spending money like Atlanta and Tucson (and even Washington DC who hasn't used theirs for revenue service yet) did for what will again probably be a less than daily operation without a clear destination.
As for Seattle, besides being cut off from its maintenance/storage facility, the Waterfront trolley would also have become a victim of the Boston-like project to submerge a freeway (the Alaskan Way Viaduct) under the ground. Perhaps our Seattle members can tell us what the status is of that project, but I don't think its completion date is anywhere in the near future -- so even if a new facility were built for the Waterfront trolley the construction, whether current or impending, would have caused service to be suspended again for a significant amount of time. And meanwhile, with the existing South Lake Union Streetcar and the soon to be completed First Hill Streetcar, serious consideration is being given to making Waterfront an extension of that network rather than bringing back the restored Melbourne cars.