I'm too young to have been around when the old tunnel entrance was there, but a few tidbits from what I've learned from pictures and reading (some here on the outsidelands site):
The merchants would actually frequently decorate the facade of the tunnel for the holidays
The main reason for replacing the old facade was because when Muni went underground on Market (late 70s/early 80s) they switched from the mostly PCC cars that couldn't connect to eachother to the Boeing LRV's that could. The way the space panned out, a 2 car LRV would have to either stop in the intersection or after going through the intersection (if going outbound)- with the 1 car train PCC's there was enough space to stop between the tunnel entrance and the intersection. This is why they made the long platform - obviously they probably could've taken the old facade off and put it back on just farther back. Maybe they thought people (not locals perhaps!) wouldn't want to wait at a stop in the drippy fog, who knows!
When they changed the station there was also a push by residents along the K & M lines to have them go underground under West Portal Ave and pop up either before or right after the St Francis Circle intersection, obviously merchants were opposed and won.
Fyi, not sure exactly how soon, but one of the next big street projects for the city is tearing up the St Francis Circle intersection and repaving it and such, it'll be a mess, stay alert!