Because, first of all, passenger rail was disproportionately more expensive than a highly profitable cargo. But also, and of great cultural importance, the automobile essentially emancipated a rising middle class and working class post World War II. "See the USA in your Chevrolet." And nowhere was this more true than outside of the Northeast and it's denser, though not as far reaching, rail system.
But overall it was still the cost of passenger rail versus cargo rail for the private railroads. Outside of the Northeast and perhaps the industrial Great Lakes as far as Milwaukee (certainly Chicago) passenger rail was for distance travel, not for daily commuting.
Then with the 1950s came not just the empowerment of the middle class to control their personal and family transportation, the American romance with the automobile was on the rise. And while it served individuation in short daily travel, the American automobile was built for distance and flexibility, and so competed directly with passenger rail; the traveler, or traveling family (and that is important), was granted a flexibility of direction and destination unknown to rail.
Years back, a friend who was a Vietnam vet, and a Chicago butcher, who then became a GM auto mechanic, rightly said, posing both the question and answer: "Why are American automobiles so big? Because it's a big country."
If you are old enough, you would remember jingles for oil companies, such things as
🎶"Gonna take my car and travel far on US 41. My family's looking for some fun and plenty of Florida sun. Got folks to meet in Old St Pete and all along the line. Going to fire up with Firebird Super at the big blue Pure Oil sign."🎶
And of course such iconic roads like "Route 66." It was the 20th century version of the 19th century's western movement, a kind of motorized Manifest Destiny after the wagons, and then the heavy rail, came the romantic narrative of the American automobile.
So it was much more than just "cost" for the railroads, even though that was the primary issue.
Despite the railroad having its own romanticized era, by 1970 America was no longer tied to the railroad tracks.
Then why did passenger rail become unprofitable in the 1950s?