Amtrakowitz wrote;
What "diminished suitability" would that be? Looks more to me like the railroads have adapted, albeit poorly (because they aren't expanding), to regulations that are as onerous as in the past in some respects (less in others). Regulation keeps the railroads from exploiting their true potential.
The rail industry at its time of greatest market dominance (roughly 1915-1920) was able to, and expected to be able to haul any shipment, any size, from anywere to anywhere. Improvements in technolgy and changes in consumption, tastes and styles renedered that approach unsuitable.
The writing was on the wall as early at the 1950's; by 1968. the visionary John G. Kneiling was calling for the abandonmnet of the entire separable-car, siding-to-siding approach, replacing it exclusively with a "boxes and rocks" (high-value freight in containers and low-value freight in unit trains, in bulk) technology.
What actually evolved wasn't that far from Kneiling's proposal. The railroads tried every device at their disposal -- cushioned underframes, specialized loading systems, bigger cars -- but as can be attested to by the fading paint and graffiti on the remaining boxcar fleel, "plain-Jane" technology will serve what's left very nicely. "MM&P" (manufactures, miscellaneous and perishables) can go in containers, and in a few cases, like livestock, it just no longer goes at all.
Yet today, the railroads handle about 3 times the ton-miles compared to the period of their greatest dominance, with about one half ther physical plant and one-tenth the labor force, and when it's pointed out that that labor force represents about 0.3 percent of the working-age population vs. 4 percent a century ago, the general lack of familiarity with the basics of rail operation among suburbanized, feminized over-sensitized NIMBYs becomes a lot easier to understand.
My personal guess is that the "mainstream" rail industry will continue along the path of specialized, high-volume-orineted service. There's the possibility oi the new "Panamax" canal eating away at some of the highest-value freight, but with the rail network now rebuilt and somewhat more adaptable, I suspect that an adjustment of rates would lure enough intermediate-distance moves back to eventually operate at capacity again. Wheteher the industry would rally be enthusiastic about major additions to capacity in a constantly-shifting political encvironment is another matter.
What woukd really fire my imgination would be for someone with plenty of megabucks and an entreprenurial approch to try to create a service totally outside the "conventional" system -- modest-sized shipments of a few carloads siding-to-siding in a manner similar to "exclusive use" trucking tariffs. There are a couple of candidates out there in the flatlands of the Midwest and Great Lakes-- if the right sort of thinking appears.