Who knows how high the ratings would be with a mid dial position. I think saying you can't sell the format is just an excuse not to. You don't like our music, and we don't like yours.
The problem in large markets is that most of the ad business comes from agencies or ad departments and the clients are multi-location retailers and service providers or things like insurance or national products and brands.
Practically none of those clients buy specifically over-55 audiences because all kinds of research shows that older people have very established brand preferences and require too many ad impressions to create any trial or change... often costing more than the profit. This is not arbitrary; major advertisers have studied this in great depth.
In fact, CBS TV has been trying for years to go to ad agency clients and agency upper management to get the 55-54 tier added to TV buys... mostly because CBS is the oldest leaning network. But years of efforts have apparently yielded no significant results. TV buys all tend to be 18-49 focused which is why the ratings published on the web almost always show that demographic first.... and shows that are renewed have to perform there.
Only products and services that specifically want older persons will benefit from using that type of station and format. In part, that is because senior-specific services generally appeal to needs older folks did not have when younger so they have no prior brand preferences and habits.
In much smaller markets, older leaning formats can do better for several reasons. First, most business is direct and local. Second, the geography is more limited, and a single location can serve it all. Third, the client themselves may be in the older age group and more comfortable with a format that they enjoy themselves.
Agencies and ad departments are much more "scientific" and the decisions are made based on well studied customer and expenditure profiles.