This is really short sighted. If that original tram network was kept in place and upgraded, then money could have been spent on suburban rail networks.
I'm passionately in favor of your counterfactual. If we hadn't allowed so much low-density development, if we'd have kept and extended the streetcar lines, if we hadn't invested so much in automobile infrastructure, then we'd be in a much better position today.
But now we're faced with a confluence of factors that make getting to that counterfactual really, really hard. Those factors, collectively, are what I'm referring to when I say we're too "spread out."
"Spread out" isn't just about distance; it's about population size over a given area. It's about density, in other words.
Excellent examples: Melbourne and Adelaide in Australia. In fact, Adelaide is pretty spread out and suburban, but it still has a nicely laid out (if a bit dated) train network). Melbourne didn't ditch their trams and now have the largest network in the world (and they still have tons of suburbs with regional V-Lines reaching almost all of them).
If the tram networks hadn't been removed, we would have seen different priorities. Also, just because it's gone now, doesn't mean we shouldn't start fixing it. The amazing thing is when you do lay out rail, people tend to start building around them; including stores and housing. They have a an incredible impact on commerce simply by being laid down. There is a psychological impact of seeing the rails and seeing the trams pass at constant intervals that changes the way people think about transport.