Second, Houston's urban center is not heavily populated, never has been, and likely never will be. It's a decentralized city with low population density. Nobody lives downtown save a few highrises and apartment complexes. All of Houston inside the "Loop" could benefit from a real mass transit system specifically because it is decentralized. It would also be an inefficient use of land to build more apartment complexes or highrises there as doing so would consume more lucrative real estate from commercial and hotel uses. If you built living quarters in the urban area you wouldn't need to transport the workers to the jobs, so therefore no need for extensive mass transit beyond the urban area. Therefore your assumption about rail being an "intelligent alternative" does not hold.
Third, it does indeed matter what city it is. Houston is not New York and New York is not Houston. Take an example: Building a subway system in Houston, for example, would not work even if New York has it. Why? Because Houston's land is clay-based and prone to flooding. No subway needed only "surface transportation". Take another example: building an oil refinery near downtown NYC won't work like it does for Houston because there isn't nearby oil pumping into NYC to be refined. You'd have to ship it over long distances from somewhere else. From personal experience; I, as a licensed "Tankerman" aboard an ocean going barge pumped crude oil to a refinery while looking at the Statue of Liberty and the World Trade Center under construction. That refinery was closer to Manhattan Island than Shell Oil's Deer Park, Tx. Refinery is to downtown Houston.
Yes, and this thread isn't referring to mass transit as a whole - just Metrorail's version of it.
All of Houston inside the "Loop" could benefit from a real mass transit system specifically because it is decentralized.
Not as currently designed, which I again remind you is the focus of this thread. It takes 20-30 minutes LONGER to travel across downtown via Metrorail than it does in a car.
If you built living quarters in the urban area you wouldn't need to transport the workers to the jobs, so therefore no need for extensive mass transit beyond the urban area.
I suppose that's a nice model for Hanoi or Stalingrad, but here in Texas they build those "living quarters" (we actually call them "houses") where people desire to live and where the demand for those houses is strong. Right now the strong markets are all outside of downtown. Some are near downtown and some are not, but the option is there for anybody who wants to live in a certain part of the city over another. Simply building high rises in the middle of downtown and saying "move here" won't work though, and at present it simply isn't the most economical use of those lands. The high rises that are already there are sufficient and companies want the land for other things.