With other countries having high-speed rail, that's made airplanes even less appealing as long and medium-distance transportation. Could the US simply turn rail back over to private industry? Probably, but as the linked piece indicates, freight lines aren't really compatible with the new high-speed passenger lines.
[Freight railway] owners worry that the plans will demand expensive train-control technology that freight traffic could do without. They fear a reduction in the capacity available to freight. Most of all they fret that the spending of federal money on upgrading their tracks will lead the Federal Railroad Administration (FRA), the industry watchdog, to impose tough conditions on them and, in effect, to reintroduce regulation of their operations.
Just seems to me that conservative/right-wing plans to destroy Amtrak would give America the worst of both worlds, we'd keep our annoying and inconvenient restrictions on air travel, but we wouldn't be able to just use Amtrak as an alternative. Would private service be cheaper? Probably, but that's not because private service is inherently better than government service. The main difference is that private lines could concentrate on medium-distance services of 50 to 500 miles and not have to worry about longer-distance lines of over 500 miles (The Boston to Washington Northeast Corridor is 440 miles long) whereas Amtrak has to run much longer-distance lines that run from California to Illinois or from Chicago to New Orleans. So yes, privatised rail service would see a big drop in costs for rail passengers, but those relatively few people who use long-distance passenger rail would get clobbered with either very expensive service or no service at all, being forced to go by air or having to drive.
Last night, I was at the public meeting that was considering an occupation of Philadelphia, modelled on the successful Occupy Wall Street action. As a traditional-news reporter was asking questions, it occurred to me that one of the major reasons I was so excited about it was that it pushes the Republican assault on government off of the front pages and that it drives the Republican/Tea Party-inspired drive for austerity and cutting the budget onto the back pages and out of peoples' view. If we can keep the attention of American citizens focussed on what we citizens need as opposed to what the plutocrats and oligarchs want, we're far more likely to succeed.