If it was a 17,250-square-foot, 14-bedroom mansion, I'm pretty sure it wasn't just some random ramshackle home from the 20's. But that is just an assumption.
I believe the article also stated that tearing it down and building a new 6,000sqft home would be cheaper than the renovations/repairs required, so I wouldn't go too far with your ramshackle assumptions.
Structures that earn the designation "historical" require certified craftsman for all repair work. It costs significantly more than typical home construction and therefore increases costs greatly.