As a city temp, I contributed to the 1998 Waterfront Streetcar Extension Study. I have since served as planner for several rail transit projects around the country.
I endorse reintroducing the Benson Line along the new waterfront. The old single-track configuration limited its utility. With the viaduct removed, certainly there is room for an exclusive double-track transitway–at least south of the Aquarium. With the transitway, there would be no waiting in a siding for the oncoming streetcar to pass.
I also believe that streetcar has a place on First Avenue. Though close to the waterfront, the slope north of Coleman Dock is a pedestrian barrier that makes First Ave a separate transit corridor. Also, it is unlikely that First Ave will have dedicated transit lanes–thus giving the waterfront transitway added attraction. Modern cars seem like the best fit (along First Avenue).
Benson Line cars as a shuttle between Pier 70/Sculpture Park and the International District sounds fine. However, the Waterfront Transitway would also have utility for the greater Seattle Streetcar Network. Use modern vehicles and trainsets to extend south along First Avenue S. through the Stadium District, past the Starbucks Center, and on to the SODO light rail station. Extend north over a future Broad Street Bridge to Uptown (via Western), and from there to South Lake Union.
The Benson Line is an existing transportation asset that deserves appreciation and use. The Waterfront seems like a great place for its return.