This arc is a meta-commentary at DC editorial mandates
Linda -Peter David- wanted to bring Kara Zor-El back and keep her world -his book- alive, but the Powers To Be -DC editors- vetoed her and insisted that Silver Age Supergirl couldn't exist in the mainstream DC universe. The Silver Age Supergirl would have eventually become a native to the Post-Infinite Crisis universe.
If they had allowed the Silver Age Supergirl to remain on Post-Crisis Earth and star in the proposed Blonde Justice series. Then during Infinite Crisis, much of her Silver/Bronze Age history would have been restored (if altered to fit) and her Heroic Sacrifice in Crisis on Infinite Earths would still be remembered. A new story would have been written to reveal that she was unable to move on following her death and became a wandering spirit, which have led her to somehow be Back from the Dead during the events of Many Happy Returns.