I do remember one instance when they did try and show that the Diner was on Station Beach (the other side of Palmie) - someone had just left the Diner, someone chased after, and they immediately cut to the outside where they were shown walking away from the Seaplane Wharf.
I don't know why they didn't use that in the first place as it's a Cafe anyway!
Probably because they needed somewhere that had/looked like it had an apartment over it with the mudslide storyline in the works as well. I did think that when I've seen that cafe with the pier before, it's a really nice location.