The answer to that is easy - private railroads at the time could barely afford to offer scheduled service and standards were dropping fast. No private railroad has ever made money at intercity rail travel since the turn of the 20th Century, but they were always able to keep it going by subsidizing with their freight hauling. But autos, the interstate highway system, and cheap air fare sounded the final death knell for long distance trains.
Railroads are incredibly efficient at hauling large quantities of bulk material long distances quickly. Efficient at intercity rail travel they ain't, except for certain city pairs and corridors.
I like the idea of getting the gov't out of the business of running a major transportation system and let the free market and innovation decide what part of rail travel survives as a profitable business.
” No private railroad has ever made money at intercity rail travel since the turn of the 20th Century”
Widespread passenger rail remained viable up through the end of WWII.
After that it lost its customer base due to increasing automobile ownership, the vast expansion of paved highways, and the advent of passenger airline service.
Highways and airports benefited from preferential tax treatment- they are mostly government subsidized, whereas RR tracks are private and are taxed AFAIK.
In the early 20th century intercity tracks were built to handle passenger trains at speeds of up to 120 mph. It’s expensive to maintain roadbed that can handle those speeds and freight traffic doesn’t need it. So when passenger traffic dwindled railroads couldn’t justify the expense.
It’s a shame we no longer have the grand central stations in our big cities and high speed trains travelling between them. But like the massive steam locomotives that pulled them their time has gone.