Absolutely agree. Also, railroads often had little flexibility in changing or dropping their routes. They needed gov't approval which, in theory, wasn't a problem. However, RR regulators were not adequately factoring in the problems posed to the RR's by the newly created interstate highway system and the increased use of planes. Thus the gov't unwittingly greased the skids for the demise of passenger rails. And this also ensured that the U.S. would become a car dependent country.
I think there's also a hidden unintended consequence from the ICC system: Railroads couldn't just trial a new service and kill it if it didn't work out (either repurposing the equipment for that service or selling it to someone else), meaning that I suspect as early as the late 1940s railroads had some impressive trains planned that they simply didn't roll out lest they get stuck with money-losing premium trains that they had to battle to discontinue. The
Chessie comes to mind, and there was another Rock Island-SP California train that ran into the same fate when the 79 MPH mandate hit them on the head.
Also, the 79 MPH mandate seems to have been one of the more impressive cases of agency mismanagement. The ICC had been pushing railroads to pursue something akin to ATS/PTC as late as the 1920s and required a bunch of them to "trial" it on at least one line. However, almost nobody "bit" beyond that. When that crash happened in Naperville (one train rear-ended another), the ICC imposed a 79 MPH speed limit on unimproved routes after X date, expecting the railroads to pay for the improvements. Instead, they mostly just cut speeds/padded timetables. Gee, a safety mandate gone wrong...who would've thunk it? ;-)
Pull that one (sincerely well-intentioned) mandate away and let railroads plan to run at 100-110 in the 1950s and 1960s and I suspect things look a lot different. GM may have done a lot of bad stuff, but this particular mandate, which basically forced railroads
down to highway speed, probably did more damage than
anything else since it made it effectively impossible for railroads to keep reducing runtimes. Don't forget that the Pennsy and NYC were still trimming runtimes on the
Broadway Limited and
Twentieth Century Limited until the mid-1950s (the
Broadway bottomed out at 15:30, I believe). Absent that mandate (and the resulting wreckage) it isn't hard to envision some further timetable massaging that could have forced the
Broadway down to 15:00 (which would, incidentally, start to make a NYC-Chicago day train a viable option). I suspect there's a pretty good case for the railroads and Budd, Pullman-Standard, and ACF to have put some effort into something in that vein if they could avoid the "lightweight problem", but the speed limit arguably put that out pretty hard.