Go back and read the history of Conrail and Amtrak. The nationalization of the Eastern railroads didn't unfold quite the way you've presented it here. The push for government control of the railroads began in the aftermath of the Penn Central bankruptcy of 1970, but Conrail didn't come into existence until 1973 when the Penn Central owners threatened to liquidate the company's assets unless the Federal government bailed them out when the company was losing $1 million every day it stayed in business. Does this sound familiar? LOL.
Conrail became a profitable railroad as result of the deregulation of the Staggers Act, but also because as a government railroad it was able to do things that private railroads would have found difficult or impossible to accomplish -- like changing labor agreements with its unions and by selling off redundant and lightly-used rail lines. Today's network isn't "overburdened" because of anything related to government intervention. It's "overburdened" because the industry operates on the smallest possible network and therefore prioritizes its most profitable loads (often at the expense of others).
You seem to want to believe government sources too much.
When Amtrak first started (on May Day of 1971, take note), intercity passenger rail service was cut clean in half with no explanation. Aside from the government-owned Northeast Corridor, it was in conflict with all of the private railroads that had formerly owned those services. Average speeds fell to levels not seen since the beginning of passenger rail in the US—except on the NEC, which connected the liberals’ three favorite cities on the east coast.
Between the end of WWII and the end of Amtrak, government regulations had forced private railroads to operate trains at uncompetitive speeds, no faster than 79 mph for passenger trains for the most part; those same regulations combined with taxation forced many railroads to defer maintenance also, and a number of very ill-timed strikes ended up breaking many railroads financially (most notably a strike by the Transport Workers Union against the Pennsylvania RR in 1960, the first that company had ever experienced); and there were other factors such as being forced into agreements to pay firemen for no work when railroads converted from steam power to diesel. Many states ended up subsidizing passenger services, giving them undue control over the railroad companies; and a lot of passenger service was operated under government mandate. (See the pattern of increasing control?)
Conrail cut its way to “profitability”. Once a company finds a way to profit, it ought to stand on its own feet, correct? Instead, this margin of “profit” after balkanizing the railroad network of the eastern seaboard and midwest was a setup for takeover by now-crony-capitalist railroad companies. And it is funny that not only Conrail but other railroad companies rebounded with profit once taxes were repealed and service deregulated.
Claiming that customers had no control over railroads except through federal regulation is garbage. Multiple railroads served just about all towns and competed for customers everywhere in the USA, without regulation; once regulation came to be, those numbers dwindled, creating de-facto monopolies and inviting the induced need for (what?) so-called regulation, and matters such as trackage rights, haulage agreements and “bridge line” railroads had existed long before regulation anyhow. Large trucking companies these days hold monopoly over many sectors of where they serve, and the drivers of trucks are not held to the same legal standards as a locomotive engineer—otherwise we’d lose about 90 percent of them due to being disqualified for driving licenses over speeding (an engineer who overspeeds by 1 mph consistently loses his certification and his job, per government regulations).