Passenger rail in America is doing just fine in places. Texas was going to have a privately owned and operated system except for aggressive lobbying and lawsuits conducted by Southwest Airlines. The result? Now the State of Texas is building the same system at taxpayer expense that could have been built by private investors.
Amtrak’s northeast corridor is profitable now that they’ve got the rails upgraded.
Passenger rail in other areas can do just fine if they have dedicated rails. The current model of running passenger trains on rails where container cargo has priority is not going to work. But that’s an argument for another topic.
What is relevant now is that while passenger rail has been struggling for decades it has been demonstrated that once a region reaches a certain population density then it becomes viable for intermediate range travel of 150 miles to up to 600 miles.
Portland-Seattle is another corridor aside from San Francisco-LA that is looking at HSR and a Portland-Seattle route makes a LOT of sense.
http://www.wsdot.wa.gov/Funding/stimulus/passengerrail.htm