1) it's much less cost-effective to make a flight comfortable, in terms of leg room, food, space to walk around, than a train trip; this difference only gets bigger as liquid fuel prices go up;
2) as a practical matter you can't build airports in the heart of urban centers.
If there was a 14 hour train between NYC and LA, with the leg room and amenities of existing Amtrak trains, I think it would give air travel a run for its money. Taking a cab to LaGuardia takes about half an hour from Manhattan, and it's like a $40 cab ride. Another half an hour in LA, probably $50+ cab ride. Add at least an hour at the airport for each scenario, plus the 4-5 hours of actual travel time, and you're looking at an 8 hour trip.
Would you rather have 8 hours of cab -> airport -> airplane -> airport -> cab, or 14 hours just walking from a downtown train station, onto a train, and out of another downtown train station? Would you rather spend 5 hours crammed into an economy class seat, or 14 hours in an Amtrak train with a ton of leg room, where you can get up, go to the snack car, etc?