You suggest "another town which is by the sea could offer better facilities for such a Festival"
Might I suggest you look at the Gosport & Fareham Easter Festival in Hampshire? It's by the sea and takes place at the same time as Lancaster every Easter with concerts and sessions in comfortable indoor venues and concert halls plus free parking for caravans. Not such a Maritime emphasis as Lancaster but worth looking at all the same.
I used to alternate between Lancaster and Gosport and enjoyed them both. I will be sorry if Lancaster Maritime Festival disappears due to cuts in local Council funding - the same problem as at Sidmouth.
When will these Councils realise that Festivals bring people like us into their areas to spend lots of money in their hotels, pubs, cafes, shops, petrol stations etc.?
Take away the Festivals and you take away the visitors and our wallets. It's all so sad and so very short-sighted.