So, can someone please tell me how WDFW could allow a C&R fishery on Skagit wild steelhead, or any other PS stock fro that matter?

It is not legal for them to do so. A C&R fishery is a "Direct Take" of an ESA-listed animal, you are targeting the wild fish. For those of you who are arguing that it's only catch and release, it doesn't matter much what the hooking mortality estimate is, if it's not 0% it's a direct take take under the ESA and it's currently not permissible. Right now all allowable impacts (4%) are used up to get at the early-winter hatchery fish from Marblemount. Those hatchery fish are the only reason anyone is fishing at all for steelhead in Puget Sound rivers. WDFW can get these "Indirect" fisheries permitted, because they are targeting the hatchery fish and are still managed to not exceed the 4% total impact on the wild fish.

Not trying to dismiss people's desire for the return of these fisheries, just trying to add some context to the discussion.