My fork stem is rusted - should I replace the forks?
The corrosion can be removed from the steerer with no problems.

If the corrosion was bad and extended into where the top headset bearing sits, there might be a problem as the steerer would not fit into the inner bearing race properly. I can see that is not the case here. (Interestingly you can see where the stem and spacers are positioned on the steerer from the corrosion patterns.)

Clean the corrosion of with a coarse steel wool or high grit emery cloth. Get some decent assembly grease and put a light coat on the steerer, and the stem bolts, interface between stem and handlebar etc.