Those urban rail systems were built by huge, monopolistic corporations, and were generally ripped out by local governments— e.g. Fiorella LaGuardia used WPA employees to tear out NYC's trolleys: http://www.nytimes.com/1975/07/09/archives/last-trolleys-rol... And much of the mid-20th century suburbanization that gutted American cities for decades was driven by high-minded federal policy, prototyped by that of Rexford Tugwell: https://en.wikipedia.org/wiki/Rexford_Tugwell

To me, the lessons of 20th century American urban policy are more about the dangers in embracing the wrong technology (automobiles as the solution to all transportation problems) and rebuilding cities to serve that, as opposed to a simplistic story about private interests destroying down public goods.