Until the end of WW2, rail transport of both passengers and materials was extensive in the US. By the 1930's, a battle of luxury trains had emerged in the heavily traveled NYC to Chicago route, between the New York Central and Penn Central railroad companies. In those days, air travel was both uncomfortable and dangerous, while automobile travel was slow and dangerous, over 2 lane roads of unknown quality, using vehicles of dubious reliability. Breakdowns and flat tires were common with prewar vehicles. Rail was the long distance travel method of choice in the US, until WW2 ended.
After WW2, rail was slowly abandoned in favor of cars (people) and trucks (goods), to the point where passenger rail traffic was nationalized in 1970, following a decline in passenger rail traffic that led to the bankruptcy of Penn Central.
The reason for this decline can be summarized:
Cheap automobiles. Consumer goods taxes in the US are fairly low compared to Europe (no VAT), so vehicles are cheaper. At the end of WW2, the US had factories for war production all over the nation, some of which were converted to automobile production, lowering the price even more. You can build a car fairly cheaply when someone gives you the factory.
This was an extension of a trend that began in the early 1900's, when Henry Ford not only built a car that was cheap, he also paid his workers a high enough wage to where they could afford one... thus creating his own customer base.
Cheap gasoline. This is a big one. Low taxes mean that gasoline is cheaper in the US than most of the other nations. In the postwar period, it was dirt cheap, resulting from the large number of refineries set up for war production.
A large investment in highways after WW2, the interstate highway system. This was an Eisenhower initiative, having seen the benefits of 4 lane highways in Germany for moving troops around. Traveling across the country by auto was now practical, as the big highways meant higher speed and greater reliability as compared to poorly maintained and meandering 2 lane roads of prewar times. The highway system was also used by trucks for transport. In the days of cheap fuel, the increased flexibility and greater load carrying ability of highways saw a number of distributors shift from rail to trucks for transport.
To a degree, the longer distances traveled tend to make the faster air travel more appealing. This shift was boosted by the postwar cheap gasoline, plus cheap and reliable airliners from the numerous aircraft factories that had been set up during the war. The US dominated airliner and light aircraft production in the postwar period, partially because they had so many factories that could be converted to civilian aircraft production, and those factories had not suffered any war damage.
Whether that shift in long distance travel is an improvement in today's situation, is debatable. I have fond memories of traveling from Chicago to Los Angeles in 1968 as a boy, on one of the last luxury trains, the Super Chief. The trip took about a day and a half, which isn't much longer than a transcontinental flight today, once one factors in delays, security checks, canceled flights, and other disruptions. Unlike air travel, you were treated like royalty on the trip with five star service, your own bedroom, lots of room to roam around, and you really got to see the country. You haven't slept until you've been gently rocked to sleep on a train. Far more comfortable than crashing on a couch while waiting for a flight.
The decline in rail traffic in the postwar period was mirrored by the decline in transatlantic ship travel. The first high speed jet service across the Atlantic began in the late 1950's. Within a decade, passenger ship travel was effectively dead.
Passenger rail traffic is still prevalent in some large urban areas, particularly NYC, Boston, DC, and Chicago, operating largely as commuter services. Also, in the postwar decline of rail, a lot of rail lines have been discontinued as too expensive to maintain for the limited use. Passenger traffic evaporated and trucks serviced the smaller communities for materials transport.
Some of this is cultural - the average person in the US just doesn't think about using the passenger rail service that is available for anything other than commuting to work. The quality of passenger rail service today isn't nearly what it once was with the high speed luxury trains, though the trans Canada line operated by Canadian Pacific shows that high quality long distance rail travel can be operated at a profit.
So, to a degree, the US rail service was a victim of the country's economic success of the 1950's.
One bright note: the Elon Musk sponsored hyperloop, an underground rail service capable of very high speed (300+ mph) may revitalize the concept of rail travel in the US. Being underground, it isn't subject to weather or other damage, so far higher speeds can be achieved at a lower energy cost. Plus, unlike airliners, the hyperloop can be powered by electricity alone, opening up the possibility of greater green energy source usage.