Victorians drive me batty. We can all see the existing retaining walls on the houses right next door, right? I'm not defending this new one, but I'm saying even if you hate this sort of thing you can't possibly be serious that it's something unprecedented. Nobody goes to Gonzales Beach to get away from waterfront houses and their retaining walls.
The main point here should be, do a decent job on this new wall and its terraces so that it fits the context. Methinks that's always the main point that people want to ignore during such controversies.