Would love to agree with your logic. Except that my experience strongly disagrees.
Trains, in every country worldwide, from Japan to Russia to Africa to Europe, have been a huge success. Environmentally very friendly as it mostly runs on electricity, fast, efficient, cheap. If you account for all the money given to car companies for electric vehicle research,money spent in keeping soldiers in middle east to keep oil supply safe, money saved in reduced freeway maintenance, money spent to make sure tires and lube oil disposing properly, money EARNED when empty parking lots are turned in houses and shops, the expense on train is a chum change. Yes, including all the extra expenses train brings in, still it is a huge plus.
About terrorists. Terrorist impact on average person's daily life is highly overrated. I come from India and still I would dare make that statement. India has very high casualties due to terrorism. Still people use train everyday. Same with Pakistan, China, Russia, Europe, Middle East, etc. Can you destroy a train bridge or track? Yes you can. But given the amount of media attention you get, you can bet that the law enforcement agencies will hunt you down to the end of the earth.
So how many people are smart enough to destroy a train track? A lot. But given the fact that you would most likely get death penalty or life in prison, how many people are crazy enough to do that? Very very very few.