http://www.washingtonpost.com/wp-dyn/content/article/2010/03/19/AR2010031906452.html (http://www.washingtonpost.com/wp-dyn/content/article/2010/03/19/AR2010031906452.html)
I'll say this again: Start a new NH2 route serving the old NH1 alignment from Southern Ave. At the same time, send the (current) NH1 across the river to King Street. That way, everyone wins: Tourists keep their near-nonstop ride to "safe" Branch Avenue (and get a second "safe" choice), workers and people heading from points north get Southern Ave restored, and Virginia finally gets a viable transit connection to National Harbor and gets cross-river service restored.
Who really loses here? The $8 one-way water taxi that goes from Old Town to National Harbor? I'd even think that Annapolis and Richmond would win here as it makes crossing much easier than the "L'Enfant Leap".
The water taxi won't miss out. It's too touristy to fail. Any claims to the contrary are as Chicken Little (oops) as Tourmobile's claims that Circulator would put them out of business. So far, they're still plugging away with the same raggedy gasoline front-engine non-AC'ed artics that they've had all my lifetime with no signs of change, but they're far from out of business.
Do you think a family of tourists would pass up a boat to ride a bus that doesn't take credit cards or one-day passes? Not after they've taken a nostalgic ride on the quaint, historic King St Trolley (end BS) down to the charming Waterfront, where they can make a direct connection to the Water Taxi?
Bottom line: you're right -- no one loses.
I'm ashamed that I never visited the waterfront in Alexandria! Riding the ferry sounds like fun!