What happened with flight AC692 to St John's?
Why return to Toronto and not stop on the way:


Generally speaking the most probable cause for reverting back to an airport that seems an unlikely choice is that the airline has a base there. From a base airport the aircraft is readily available for other use, and crew rotations are easily managed. In addition to that, if the "unsafe to land" condition was due to a technical issue with the plane, maintenance is secured at a base airport, but not necessarily elsewhere.
As Verandaguy pointed out in his comment, Air Canada does have a base at Montreal, which would have been closer to the aircraft at the time of diverting. This being the case, the reason for returning to Toronto is very likely to get the plane and crew to a position that best suits  the following rotation of each.
We do not know about the flight hours the crew had on them, so diverting to a non-base or non-scheduled airport might have caused serious trouble with continuation of the flight: You might have to fly (or if diverted to a base, call up) a relief crew to the divert airport  to fly the plane onward, and the crew with rest period limitation would have to be flown to their "home" base airport. This situation might have arisen at St. Johns after a stopover enroute.
While I at first did not think that weather was the reason (ref. METAR posted by Federico), it turned out that runway conditions were not suitable for landing in high and gusting crosswind (comment below by Mike Sowsun, kudos for that). We do not know the weather trend, so flying to, say, Halifax might prove problematic if the weather and/or runway conditions did not get better fast enough (see previous bullet point)

Fuel: too much to land at destination, too little on arrival at Toronto?


The reason for not carrying extra fuel is pretty much solely economical: it's a huge waste of money to fly fuel around instead of cargo or passengers. However, while it is true that airlines do not like to ferry extra fuel, an aircraft has all sorts of reserve fuel on board: you carry extra juice for trip to alternate airport, holding at destination or alternate and so on. When a crew decides to divert to an alternate airport, they make sure they choose one that does not result in fuel emergency.
It is therefore extremely unlikely that the plane was running on fumes when it arrived at Toronto.
Nor is it likely at all that the plane would have been over fueled by mistake. If it had been so, you would most probably just have circled at St. Johns for a while to burn the excess off, or dumped on the way there.
The observed use of flaps and/or speed brakes cannot be used to determine the fuel situation of the plane. These are more likely dictated by traffic situation.



As for the reasons for not landing at intended destination: As Mike Sowsun commented below, runway conditions were less than satisfactory, and the captain made the only possible judgement call: high gusty crosswind + slippery runway is a big no-no. A roadside observation cannot be used as a reference when judging what conditions are at an airport, even nearby. I know by experience that local variations in weather can be huge at places such as St. Johns. Also, changes in weather at these latitudes in coastal regions are very hard to predict, sometimes even for such short periods of time as the duration of this flight.