You're partly right Havana Club... But the problem is that in fact the idea of doing a land swap "has" been entertained with the possibility the old cathedral and land being given to the City Council in an as-is-where-is basis.I don't think there's a failure to recognise cost by heritage advocates - kinda the opposite actually. I believe its been reasonably well established that the money can be found to pay for it - just not from the anglican church. (This has been a discussion in other threads.) The problem is they've never offered that they will release the site (e.g. in exchange for another) if someone wants to take it on. Hence, there has never been the opportunity to put the theory that no one will pay for it to the test, hence stalemate.
People will have different perspectives and anecdotal evidence about why few developers have invested or are interested in Cathedral Square any more. But without the cathedral I think it would lose its reason for being somewhat, and I certainly understand office managers making a lease decision preferring say a river view than something sterile. I know someone who made exactly that assessment - when there was no commitment that the Cathedral was going to be there she just moved elsewhere. Of course there were other factors in the decision but that was part of it
The problem is that the council is probably the only entity that could be in a position to do it and they have already said they don't want it and the only rational reason I can see is because it's a potential budget-blowout liability of monster proportions.