Yes, we do. The death of railroads wasn't due to airplanes, at least not entirely, but due to the heavy hand of government interference(and Unions didn't help either).
I take the Delta shuttle between NY and Boston all the time, and I can tell you that the increased traffic on Amtrak is a direct result of the airlines horrible on-time record, especially in the summertime. Just the hint of a thunderstorm means your 6:30 flight will be delayed 2 hours, at least. I know a lot of business travelers who are going for the Acela instead. I would too, if my company let me.
That being said, I'd like to take a long trip on some of the refurbished lines, with the old Pullman cars, Bar cars, Dining cars.
Rail service in the NE corridor would work, if I lived there, but I don't, and never will.
well, that's an interesting theory; certainly for its creative logic and laissez faire emotional appeal, if nothing else.
But I think it's also ridiculous. Rail would have collapsed under its own weight a very long time ago, as would the airline industry have more than once, as the auto industry nearly did, as the steel industry did.
The death of railroads was due to government building highways and absorbing the costs so transportation was close to free for end-users. Inter-city railroads all over the country were torn up and replaced by roads, driven by the auto, rubber and petroleum lobbies. The car killed the railroad, not the airplane.