I think being made was that I'm Still Here was a late addition to the score. There was probably too much that needed to be done (such as rehearsing I'm Still Here) to go back, rewrite, orchestrate, rehearse with the orchestra, rehearse with the actors, a section of the play that was doing just fine.
I think this is basically right. There was a lot to do, and I don't think anyone was concerned with having the underscoring match up in a specific way except when it was convenient. The opening music (for the ghost showgirls) is from another cut song -- "All Things Bright and Beautiful", and I think the effort was simply to have a smoothly drawn piece of prelude music that would allow everything to happen that needed to happen and get gracefully to the beginning of the actual play. Don't forget that this was not the original out-of-town opening, which involved scratchy-soudning old recordings of the Follies acts in their original versions and a fairly elaborate soundscape that accompanied the entrances. The onstage musicians played tinkly music, and the full orchestra was not heard (and for all the world might as well not have been there at all) until the first orchestral entrance in "Beautiful Girls". I'm sure that's why that entrance is as huge as it is -- it was supposed to take the audience by surprise.
It's certainly not unusual for shows to use music from cut songs as underscoring -- the first scene change in Fiddler is music from a cut song, though it sounds similar to "Matchmaker Matchmaker". But those discarded tunes have always come in handy.
