Europe is building high speed rail links across the continent, even during a recession that is combined with slash and burn public sector policies. http://en.wikipedia.org/wiki/High-speed_rail_in_Europe
Part of the difference is inefficient procurement policies letting contracts to very high cost bidders with corrupt hand tailored RFQs and hiring expensive labor from well-connected limited pools. Part of it is active local democracy of communities that have been trained by the freeway boom to see infrastructure as a disaster for places that get it. Part of it is a very slow environmental review bureaucracy. Part of it is buy-American policies even when none of the top countries in some industries are American.
But the main problem is that transit is built and run in America as a way to spread political influence for committees that distribute pork and a fun indulgence for influential people who won't ride it. In Europe and Japan, middle class voters expect transit to work and the politicians and bureaucrats who build it intend to ride it themselves.
BART to SFO cost almost $2 billion. A good connection to CalTrain would have cost under $200 million. Heck, for under $1 billion you could also have connected CalTrain and BART at Embarcadero or Montgomery with a lower total trip time for most passengers.
I don't know what BART to San Jose will cost, but you could have really high quality BRT down El Camino with similar benefits in just a year with the money BART will spend on engineering studies over the next three decades planning the San Jose train.
But the authorities enjoy being involved in a big splash white elephant project more than building good transit.
A very good and short brief: http://pedestrianobservations.wordpress.com/2011/05/16/us-ra...
More: http://pedestrianobservations.wordpress.com/2011/12/13/cost-... http://www.forbes.com/sites/stephensmith/2011/12/07/washingt...
I have also commuted on Caltrain, and liked it, but it's in weird places farther north, not well integrated with BART, and not frequent enough.
All in all, I don't think the difference in price (projections are awfully fickle) or at least utility is as clear as the OP suggests.
Local is more expensive since you are building right in the middle of populated areas. You have to get the land which is hard to do and expensive and when you do construction you are obstructing other traffic. The construction itself is more expensive too since you can't use very large machines to do it in bulk.
http://www.latimes.com/news/local/la-me-bullet-risks-2012051...
But, if you are basically saying I am comparing apples with oranges, France's ongoing investment in urban light rail is currently eclipsing the United States by an embarrassing margin.
These are figures from 2009, so are a bit old and dusty, and they are from a pro-light rail source, but they say that France has committed $29 billion for urban rail, compared to the USA's $8 billion. http://www.lightrailnow.org/news/n_newslog2009q4.htm#LRT_200...
And this is just France, which has a population five times smaller than the USA. I could try and find figures for all light rail investment across Europe if you like, but then it would just start to look utterly ridiculous.
To give another comparison, The UK spent $8 billion just on widening the M1 motorway.
[edit] Although with that last figure, nobody is really sure where most of the money went. I personally suspect that they found a new and exciting way to create road surface entirely out of pulped ten pound notes and dried caviare.
Maybe they only count federal money? But http://fta.dot.gov/grants/13442.html shows around $10 billion per year (the $29 billion is for multiple years) - not all of that is light rail specifically, but it's all infrastructure investment, and doesn't include local (state, city) money, nor any of the other federal departments.
I suspect this is one factor behind the resurgence of New York on the startup scene.