I have to question whether a new railroad over the route of the CA&E would serve much purpose, as the CA&E's route is pretty closely served by Metra's BNSF, UP West and Milwaukee District West lines. However, had the CA&E survived the '50s and been modernized, perhaps it would be operating today instead of the UP West Line.
Comments on its bankruptcy: Since its operation consisted almost entirely of low-profit commuter trains rather than the more profitable intercity trains run by the CNS&M and CSS&SB, and since the CA&E's freight operations were marginal at best, it never had a very firm financial base. There's not much to say about its demise that hasn't been said before ... freeway construction and CTA mismanagement were the final nail in the CA&E's coffin.
It is worth noting, though, that competition from the CA&E (as well as from the CNS&M) was responsible in part for the C&NW's modernization of its suburban operations in the '50s. Unfortunately for the interurbans, that made the steam road more attractive to commuters and those passengers who had not already been lured away by the freeways would eventually become C&NW riders.