You could reverse that too: "If most people wanted cars instead of trains, we wouldn't need government funding to have more highways." Except that highways are heavily subsidized as well. I agree with you that I wouldn't give up my car for regular day to day traveling, but a decent passenger rail system would be awesome for medium distance travel.
For freight, it make sense that fedex and UPS don't use freight rail, because they work on short delivery time-lines, and that isn't what current freight rail is about. Freight rail, as it exists today, is best at transporting large quantities of non-perishable goods/raw materials. Iron ore, oil, grain, large machinery, steel, coal, etc. In that market, it's incredibly competitive. As it turns out, the US has one of the best freight rail networks in the world.
Also, if we did have a reliable high speed passenger rail network, fedex and UPS probably would be using trains, as many passenger trains also have a mail car for packages, etc.