Yes - it was very realistic to think she could've beaten Witt in '84. She was the favorite to win based on her '83 Worlds win and she had the full backing of the USFSA as the #1 US skater. It was a 5-4 split with 0.1 difference on the 5th judges scorecard, and that was with the doubled jumps and single axels. Witt at the time hadn't quite developed into the 2nd mark skater she would become in the next quadrennial.
It was the right result. Though I agree with the earlier post that Witt kind of lucked out that her rivals at both Olympics didn't perform more competently, because she would never have been an Olympic champion.