Where's the imagination already???
I don't see this lack of purpose one bit..it's clear at least to me that this railraod exists in a place where there's a micro economy not big enough to bring in the large railraods outright, but not small enough to discourage a tough or rich mogul from attempting to make a go at it. 30' gauge should be enough of a signal to emphasize the nature of this railraod - it's not even a full 3 feet!
The number one commodity on this railroad would appear to be seafood. You have a lobster house on one end and an iceing platform ont eh other - htat's clear enough. But it is obvious to me that this is not the initial reason the road was built - it's a business that developed on the side and perhaps even over tok the original purpose!!
Number two is the stone quarry. I'd bet my money the stone quarry would have been the initial spark that started the railroad - shipping the stone downhill to the harbor [complete with a loop for a quicker elevation drop at one point], where the stone was then moved perhaps via float to a more developed area where the offloading could be accomplished by more developed means of transfer. Heavy loads down, light loads up, and all the heavy lifting done somewhere else. In this time period, you'd be looking at small locomotives and perhaps even horses being the main means of locomotion on the road. The initial time period would perhaps be around the 1850s...
Now once the connection to the standard guage was built, it's possible that the road then expanded beyond light operations. Stone could now be hauled uphill to the standard gauge interchange, where the elevated tracks would assist in transfering stone [along with any other production] to the standard guage - the narrow guage cars would probably sit a foot lower than standard guage cars, I'd think. The peroid represented as drawn, would suggest that the time period is now a bit later than 1850s - perhaps 1880s, perhaps even the 1920s or as late as this road would have been able to operate before trucking became big enough to take over the main work of moving cargo to the nearest mainline.
The part of the standard gauge represented here would be nothing more than a siding [like an industry siding!] off the mainline itself. That's not the end of the mainline, the narrow gauge just terminates as another industry services by a couple spurs off the mainline.
The carfloat suggest other possibilities, such as the local islands putting their freight directly onto the cars fromtheir docks [cars being horse drawn in some parts] or there being another part of the system recieving shipments from this port. Passengers would all be moving by boat, of course - so this could also be a "quicktrip" for people eagar to get to the ocean.
One popular activity in the 1800s-to early 1900s was picknicking - that was when people form the city would go out to the coutnry for day, usually get very drunk, and behave in crass manners throughout the system. You could say peopl eback then were not relaly much different than they are now, you just don't read much about the ne'er do wellers. But they were around back then, in large numbers. In the Pacific Northwest, these passengers made up the weekend crowd - and this same crowd could probably be found in these parts of the nation as well.
I don't see it necessary to have much more reason for a railroad to exist than this...I do feel it gets kind of convoluted sometimes, when things are taken to such academic extremes. You might not need so many car cards though, to be honest.