Back in the 1960's, the Red Arrow Lines in the Philadelphia western suburbs applied this principle to one of their buses. While they were probably looking to reduce streetcar trackage, one could also argue that the same vehicle could extend passengers' "no-transfer" service to self-feeder bus routes connecting to rail routes by simply hopping the bus onto rail tracks. In that positive context it was a great idea.
Why it never went further than just an experiment I imagine was that winter snows in any northeastern city would not function well with rubber bus tires propelling the vehicle on steel rails. Perhaps the additional training and control procedures for bus drivers on rail lines, and maybe a labor union demarcation problem too, and probably little or few funds available to do more research and development of the propulsion technology to overcome the snow problem is why a good idea to expand use of the rail system by self-feeding buses on rail lines never really took off.
One incident of poor traction in snow in a trial can destroy any project once the media have a go at the "failure", and the public will never accept anything that does not have the media's blessing as a "works in progress" even if part of the effort to perfect something may require a hiccup in the process. It was good that when Thomas Edison was developing the electric light bulb he didn't hire a PR consultant until after he had it perfected in secret. Once asked by an assistant whether there was any point continuing in so many tries that didn't work, his response was that he now knew 1001 etc ways one should not try it, and each one more "failure" brings us closer to the true answer as to how it SHOULD be done.
Sincerely,
Vytautas B. Radzivanas
Perth, Western Australia