Essentially, the US government undermaintained the railroads (the modern public transit scourge of "deferred maintenance" practiced a hundred years ago). It ran the railroads with a more or less single-minded mindset to supplying war goods, and after the war was over, kept a heavy touch on the railroads which made them unable to adapt to the increasing competition from heavily-subsidized highways and airlines, which combined with the headache of "deferred maintenance" meant that railroads suffered from about 1920 to 1980. (It wasn't until the failure of Penn Central that things really started getting better.)