Well, so they may not have technically always kept the entire line brush free. But it currently pretty much is.
They also got most of the line at least passable for equipment, and aside from any current/recent storm damage there is what, something like 12 of 28 miles has actually been in service. You can't really say they failed to have such-and-such miles in operation by the end of the lease, when there have been numerous major washouts and bridges lost SINCE the lease began. I don't know what the legal mumbo-jumbo may state, but at the end of the day it clearly wouldn't be reasonable to expect CMRR to have taken care of all of that AND restore an additional 12 or 16 miles of track to service. And as has already been stated, CMRR performed major bridge repairs in-house.
As far as why focus on Phoenicia end vs KIngston end with their early efforts, I think they got that totally right. DOn't forget that for the first 10 years or so at least, their daily bread and butter was the tube shuttle service. COuple that with the far greater tourism and scenery on that end of the RR, easy accessibility, parking, etc. and I think even as things shifted to a more tooursit-excursion based operation, that end of the railroad was what held things together. I don't think if they'd started in Kingston, that they would have built up a sustainable long-term business... it has done well, but part of that is novelty and part is special events I think. I also think the fact that lots of people knew about the RR after 20+ years of excursion service on the Phoenicia end played a big role in the success on the KIngston end- a new and different place to ride, 30-40 minutes closer to the City, 5 minutes off the Thruway, a place for local families in the KIngston area to take the kids for a train ride without it being an all-day event, etc. I think promotion-wise, the KIngston service was able to start with its sails already half--filled by the tailwind of the success on the Phoenicia end. BUt I think if they'd started up out of KIngston in say 1983 or 1985 with a short run to the bridge and back, they would have had a few moderately successful years before everyone had seen it/taken the kids/ said "ok seen that" and it would have turned out similarly to any number of operations that could only make a go of it for a few years before the lack of either a steady customer stream, a major scenic attraction, or a true tourism-saturated base of operations. A short ride, half of which is in back of the houses and factories of a has-been Hudson Valley town, without a major scenic appeal, and without a flatcar load or two of paying tubers every hour or two every weekend all summer long... I would have been surprised if that went on for more than 5 years. Not to mention that most of the woes have been on the KIngston end or with the City of KIngston itself!