Sorry I'm late to this thread. I just discovered it.
1) It was not in bad shape at all. In fact, Conrail had put a new roof and new storm windows on it, a few years prior to its demolition.
2) "Somebody" did want it. My understanding is that a prominent local real estate magnate made inquiries (second hand info, take it for what it's worth)
3) Like Tusten, it was also torn down "overnight". Conrail hired a crew from quite some distance away. They arrived early one morning, I believe a Saturday, and had the building leveled in less than a day. In fact, it might have been gone by Noon. Not long before the deed was done, a Conrail official was quoted in the local paper, saying that Conrail had "no immediate plans" for disposing the building (caveat - going from 25 year old memories here).
4) "Landmark" might be subjective to some, but it was most certainly considered as such, to many in Olean, and North Olean in particular. The daily arrival and departure of Erie passenger trains were still an "Event", even into the 60s. Conrail made no friends in Olean the day they tore that building down.
JR