I have many posts with "Step output file can not open." Seen, but can not find references where the step was successful. I have my output file location:
$ (ESCAPE_SQUOTE (SQLLOGDIR)) $ (ESCAPE_SQUOTE (JOBNAME)) _ $ (ESCAPE_SQUOTE (STEPID)) _ $ (ESCAPE_SQUOTE (STRTDT)) _ $ (ESCAPE_SQUOTE (STRTTTM))
Many other jobs on the same server use exactly the same output location (verified exact character match). This job is owned and run as the same user as the jobs that successfully create output files.
The job performs a DB restore of a user database with the job configuration pointing to the master database. This is the only job that points to Master, but I would be surprised if that made all the difference.