The letter as it stands is non-compliant with the EU regulations and it would be interesting if anyone chose to challenge it.
In the event of a cancellation for whatever reason, the carrier is obliged to re-route the passenger to their intended destination under comparable transport conditions - which is held to be by air. Clearly this may not be possible if the next flights with seats available are several days away.
If the carrier is re-routing via transport conditions which are not comparable - an air journey is undertaken by ferry instead - then it has taken the step to fully refund the passenger for their air journey and rebook them. ISSCo should therefore be refunding the difference between the airfare and the ferry fare, less any reasonable costs for transport of customers between the airport and the ferry pier which it may provide.
The current policy is wishful thinking by someone on the basis of what they'd like EU261 to say, not what it actually does say and require.