Traffic's down because everyone's hurting, the economy is sluggish and oil prices are causing a lot of inflation. It makes sense for the NYS&W to let the big roads handle traffic they don't have to right now, and eat the expenses of added fuel costs on it. They can concentrate on only hauling the local traffic for the online customers.
They have to maintain this line per the lease - they DO NOT OWN this section, they only lease it. The terms of the lease dictate what they need to do. The whole idea behind the lease is the usual how to scam the government routine - the state's not going to hand much money to big, wealthy, strong NS - but they'll sure give it to little NYS&W - so NS gets to basically railbank the line, and get it back in good shape on someone else's dime down the road if they want it. If not, they can extend the lease or lease it to some other road.
Who owns the NYS&W? Who knows - the company is no longer publicly held and there's no easy way to find out what the principals hold at this date.
Given the NYS&W is leasing CSX/NS units rather than run their own units, which normally is more expensive, it would seem both big roads have some ability to call the shots. There is at least one rumor claiming the big roads wanted them to dump the units more than 40 years old, but some of the SD45s are pushing on 40 right now, and the GP38-2 leasers aren't a whole lot newer than that, so it didn't make a whole lot of sense to me.