it probably didn't even have the desired "shock" effect it was intended to.
I can speak from the experience of both myself and my friends that longtime viewers were definitely shocked - and we were but a handful of the show's longtime viewership. Also, recall that viewers abandoned DS in droves during Leviathans. And while there's no way at this point to know for sure just who those viewers were, it's highly likely that a good portion of them were ones who'd come to DS during 1897 because longtime viewers of soaps tend to be very loyal to their shows - and they're very willing to stick with their shows through thick, thin and the insanity of bizarre plotting. At least back in the '60s they certainly were.
As for the reveal itself, unfortunately, I suspect it was chosen less for shock value than merely as a device to tie Peter in - and to tie him in no matter how ludicrous a tie-in it was - and given all that we knew up to that point about the Leviathans and Vicki/Peter, it was EXTREMELY ludicrous!
it was just kitchen-sink storytelling
Sadly, by that point Leviathans had long been completely reduced to kitchen-sink storytelling.
they couldn't recast Paul's ghost?
Apparently they didn't want to go that route. And besides, for whatever insane reason(s) that many of us will never understand, we know that DC just loved to bring back RD and did so whenever possible. And as we also know, when DC was determined to do something, it rarely mattered whether things made sense or not.
It was quite literally his way or the highway...