I am sorry you are finding things so difficult. The system was not designed to work like this, but sometimes judges and CPS workers become caught up in the idea that mom can turn her life around.
It will certainly not hurt to submit a letter to the magistrate. Just make sure that it is polite, factual, well-written, and does not attack anyone (even the biological mother). A letter such as this can make a difference although you never know until you try it. Some magistrates and judges never seemed to be swayed by anything written while others can be moved by a powerfully written letter. So it is definitely worth doing.
I think you need to continue to work with CPS as much as you can. They may not be doing what you want or when you want, but in the end you will want them to be on your side. So continue to keep them informed of everything that is happening, and even though they don't seem to be doing anything to help, keep them on your side. Don't do anything to antagonize or distance CPS because at some point in time they may be willing to act - and at that point you will want them to still think of you as their closest ally.
While it may seem like they (the courts and CPS) are never going to stop giving her more chances, the best chance of this happening is if you keep detailed records of all of the visits, what happens, what your step-daughter says about the visits, etc. In the end, a lot of information about the biological mother's alcohol use and your step-daughter's distress over this may be enough to overcome the resistance you are finding from CPS and the courts. So don't let your guard down, give up, or stop keeping detailed notes of dates, events, statements and reactions, etc.
You can also consider taking your step-daughter to a forensic psychiatrist or forensic psychologist with specialized training in working with children. He or she can perform an evaluation of the child and make recommendations (which you can send to the magistrate or provide to the court at the next hearing) regarding the effects of further visits on the child. Sometimes a recommendation from an expert can make a big difference to the courts although CPS rarely seems to respond to anyone else's advice as some caseworkers seem to believe they can make these best decisions without hearing anyone else's opinion.
You can also mention the idea of an independent evaluation by a "child & adolescent forensic psychiatrist or psychologist" in your letter to the magistrate. Sometimes courts will agree that an independent expert evaluation will be very helpful, and the court may even arrange it and pay for it. So you can suggest that having a professional evaluation of what is best for the child by an "independent medical expert" might be helpful to the court.
Good luck and please let me know what is happening.