Definitive counterexample: Switzerland.
Which lines were signaled and how much did it cost and how much does it now cost to maintain? The system can be made to work, its just not cost effective.
Which is why ETCS can be implemented with mostly-wired equipment, and the wireless portion is done with frequent transmitters located on the tracks. 
And the wireless portion is only to deal with inconsistent meanings of track-broadcast signals, so we theoretically wouldn't need to do that in the US. If we had a national signalling standard. Which we don't. Because we're stupid that way.
The track mounted transponders are for navigation only, everything else for levels 2 and 3 is wireless. Moreover, Europe is enamored with centralized computer based signaling. That means track circuit information is transmitted to a central computer where all the vital logic takes place and then commands are issues to dumb field stations, or in the case of ETCS, the train itself, so something like ETCS is a more natural fit with their existing signaling posture. Fortunately in North America our signaling system is distributed so there is no single point of failure and it is easier to transfer assets between corporate entities. We also run
railroads
, not a glorified mass transit system and railroad signaling needs to be tailored to the operating style and characteristics of the company that uses them. European countries have unified signaling schemes because they were engineered by state run rail monopolies. Excuse me if I prefer a little competition.
The problem is that the railroads are trying to cheap out and avoid installing trackside equipment. There really is nothing more to it than that. A system based on trackside equipment and circuit loops can be made to work fairly easily without suppressing speeds significantly (despite the example of SEPTA's misimplementation). But that costs money. (To install; it's not really that bad to maintain it.) So companies used to low margins choose not to spend the money.
You are correct that with a sufficient density of transmitters and transponders the system will work better, but that will greatly increase the cost and cost is the primary problem of PTC. The benefit of reduced accidents simply does not justify the cost of PTC and certainly does not justify a rapid transit level of signaling infrastructure as is seen in Europe. Now do you think that the freight railroads care about performance problems of a budget model PTC system? No, of course not, their trains are already dog slow. The performance hit will have a reduced impact as large freight trains are rarely in a position to hug the envelope of what track and signal speeds allow. The dirt will fall onto the highest performance users such as passenger trains and possibly some forms of intermodal.
I originally thought that a track circuit and transponder system like ACSES or ASES would solve the problems, but engineers on this forum have complained about overly restrictive speed curves and positive stop targets. That's the problem, when you allow lawyers and managers and regulators to all put their fingers in the batter in the name of "safety" they're going to spoil the cake. The only way to prevent that sort of BS is to have a system where bureaucratic busybodies
can't slow it down and that means operation by humans in the field with minimal technological oversight. It's the same reason we don't want national ID cards or gun registration.
Not exactly, but I won't go into details; the fact is that faster still == less safe in road vehicles, period, and road vehicles have basically followed a development pattern nearly as stupid as the FRA's "make 'em heavier so they'll survive better in a crash" attitude. There was a minor revolution in expressway design back in the 50s which aided safety -- since then, it's all been about making "safer crashes", not preventing crashes.
In automobiles drivers have been allowed to risk compensate by steadily improving the safety available for a given level of speed. There is absolutely NOTHING wrong with that and for years the FRA has agreed, requiring additional safety features only as speeds increase. The heartbreak with PTC is that it doesn't allow for performance increases to compensate for the decreased risk. One might say that we could now use lighter, less safe, equipment, but unfortunately PTC doesn't even address the real source of the risks, namely grade crossing accidents and non-signaling related derailments.
