Our freight system is a big part of why our passenger system sucks, though. Most of our cities see infrequent or nonexistent passenger service because the rails are all tied up with freight.

That doesn't really make sense. If we got rid of the freight trains the rails would just start to rust, it's not like there's a ton of money/interest/profit in passenger rail thats stymied by all the jam packed tracks.

That doesn't really follow. If freight rail is getting in the way of passenger rail then the cause is insufficient capacity, not the existence of freight. And the solution is to build more track (or allocate more of the existing capacity to passenger services) but that costs money, and there's no political will behind it.

If anything it sounds like the freight rail is the only reason you have any passenger rail at all.