I've been to Europe and you'd better believe there are areas where you couldn't add another lane of road.
The third-world doesn't need rail ~ the level of commerce isn't sufficient to support shipping people around. What they need are trucks with large tires!
Someone posted statistics on european and asian rail passenger levels here at FR not long ago - I was shocked at how low the figures were for the number of rail trips the average citizen of those areas took each year. Rail accounts for very low percentages of intercity travel, and those percentages have been declining for decades.
As far as the fares go, that's the point, isn't it? You raise fares enough to cover operating costs and an intercity train trip costs 10-20 times what an equivalent trip in an airliner costs.