This is only sort of true. There are lots of population dense areas of North America that wouldn't look that different than much of Europe. E.g. NYC to Boston is shorter than Paris to Frankfurt.

The main problem is that the train infrastructure where exists is old and very slow, and typically passenger trains have lower priority than freight. The end result are slow, often grubby, expensive (e.g. more than flights), trains with inconvenient sparse schedules and poor services. Not exactly compelling.