Cowardice is a pretty strong word...but I would say it is mix between misconception and lack of political will. If that's cowardice, then that's what it is.
It's interesting you're interested enough to consider battleship reactivation. I think you might like some information about what the battleships were supposed to receive in the 1990s. Their decommissionings were very sudden and off the cuff. The Iowa was in the middle of getting Turret 2 repaired at Norfolk Naval Shipyard when the order to decommission came down. They had to reinstall the armroed bolts into the turret. They were going to re-gun Turret 2's center gun, and that gun barrel is still at NNSY.
Concerning the technology being obsolete and stuff like that, the same thing was said in 1981 when they were pulling New Jersey for reactivation. Just like we would not use the 40mm AA guns of WWII in 1981 and we instead used Phalanx CIWS, we would not use ABLs instead we would use Mk41 VLS.
Not only is a VLS and "modernization" feasible the Iowas were scheduled to undergo the Warfighting Improvement Program beginning with Iowa in 1993. This would have removed the ABLs and raised the missile decks by 1 deck and added strike length Mk41 Mod0 VLS. 128 tubes would have been fitted in four 32-cell arrangements, 2 in the amidships missile deck and 2 in the aft on either side of the aft fire control tower.
The Mk160 GFCS used in the DDG-51s was going to be moded to the Mk160 "Mod4" to control both 16" and 5" batteries. An 11" discarding sabot round was developed and produced at Dahlgren between 1988 and 1989. The Mk160 was necessary to calculate the fire solutions for the long ranges achieved by this round. 51nm was the published unclassifed range achieved. Reports have placed it at 112nm.
The 5" battery was going to be removed and replaced with 5"/54caliber duel mounts designed for the Montana-class. Crane Indiana had received the builder's plans for the mounts, and HY-80 and HY-100 steel stock was being manufactured for construction of the gun mounts. The 54caliber mounts would have used the same base ring as the 38caliber mounts so replacement would have been a plug and play. The only heavy changes would have been in the powder hoists. They just needed to be enlarged to take the longer powder case.
The over-pressure problems with the Mk29 Sea Sparrow octuple launcher you commented on in the Kentucky picture was overcome. An ORDALT was made Sea Sparrow launchers that proofed them against the overpressure caused by the guns, again at Dahlgren. The launchers would have gone in place of Mts 54 and 55.
The TAS-23 missile detection system was to be added to main mast behind the TACTAS antenna. If you look at the Wisconsin's main mast you will see a large platform built behind the TACTAS antenna. They were to receive a service life extension modernization that was to extend their life to 25 years at the time of modernization.
A new propelling charge was developed using off-the-self M31A1E1 triple based artillery propellant to replace the rather aged silk bag wrapped charges of WWII in storage.
These were only some of the modernizations planned and designed by NAVSEA and Long Beach Navy Yard and scheduled for Iowa in FY1993, New Jersey in FY94, then Wisconsin and Missouri both in FY95. So, it's not just feasible, but it was about to happen.
Conerning the feasibility today, the US Navy has a whole class of steam powered ships that we will be operating for 20-25 more years: the Wasp-class LHD. All but one of the Wasp-class have steam poweredboiler power plants, as do the two Tarawa-class LHAs. So the knowledge base is still active in the fleet.
The ships themselves are big, but that's a good thing. They are as survivable (if you believe NAVSEA they are more surviable) as a CVN and have armor that was designed to withstand damage far greater than what modern cruise missiles can inflict. They're not unsinkable but they are more survivable than anything else around.
Concerning cost, I don't know what you're comparing them to, but battleships are not expensive when compared to their peers. If you compare them to an MCM ($19 million/yr) or a PC ($3 million/year) or a DDG ($30 million/yr) a battleship's yearly operational cost ($58 million) is higher and thus make them "expensive" in relation, but none of those ships have the same purpose or capabilities as a battleship. So it's not a proper comparison. However if you compare them to their peer ships, capital ships LHDs ($290 million), LHAs ($250 million), and CVNs ($401 million) they are very inexpensive.
Like in the 1980s the battleships would be the centers of battleship battle groups, or "battleship strike groups" as the terminology is today, and they would take the place of CVNs in areas that need a high volume ordnance ship but where the US Navy cannot afford to send a CVN either due to risk or because there are higher priorities. These "lower priority areas" are areas such as Somalia, Syria, the Northern Persian Gulf, North Korea, or as recent as the conflict in Lybia. These are all areas that need the potential of a heavy punch close by that cannot be delivered by a single or group of DDGs and CGs. The 16" gun provides that and the 128 VLS tubes offer 120 TLAMs.
As for the purpose of "shock value", you are right! They do have more shock value than any other type of ship, but their purpose is not shock. It is to deliver ordnance, and people can tell. That's why they have "shock value".
But to me, a guy on the ground who needs support, their most valuable quality is the ability to respond to a call for fire either in support (NGFS) or as a naval gun strike on a target that is so time sensitive that you can't wait for a TLAM fired from a DDG to get 1. programmed 2. launched 3. make the transit from the operating area (sometimes a hundred miles off the coast for a DDG) and fly all the way across the water to the land and then to the op area two dozen miles inland to hit a GPS coordinate that is now 30 minutes to an hour old. The battleship can put an 11" round in the air within 2.5 minutes of receiving the call for fire and takes less than 1 minute to arrive on target. The precision guidance kit for the NATO 155mm round (which is a replacement fuse with fins and a GPS guidance chip in it) was certified by Dahlgren last year to be used in the 11" DSR and Mk25 8" projectiles. Dahlgren is always looking for advertizing points for the 16" guns and the Mk71 MCLWG (Dahlgren wants 16" guns in the fleet and 8" guns on all new DDG and CG construction).
Reaction time and volume of ordnance is what's needed, and battleships not only provide that, but the ships are ready to go.
Thanks for the interest and feed back!