I've heard that line of defense a few times. The argument I heard in defense of the accounting was the fact it took more work to keep track maintained for 50-80mph speeds than it did for 35-45mph freight speeds. Once free of the speed requirements for passenger traffic, some roads simply stopped doing maintenance for a few years. IIRC, the MILW had well over 50% of their Minneapolis-Seattle trackage under speed restrictions in the mid 70's. When it came time to pay the piper, they wound up abandoning everything from the Dakotas to Washington.
I have no doubt UPRR and ATSF were making money on their long distance runs, and the ex-PRR and runs in the NEC were making money. I'm just not as convinced about the rest of the national network. My experience from the upper midwest was that both the CNW & MILW were running on empty a good ten years before Amtrak took over. Even after a lot of the overlaps (e.g. CHI-MSP) were attritted out, the interstates made it easier (and cheaper) for people to drive on routes under 400 miles.
Had the ICC allowed the CNW, MILW and other operators to abandon unprofitable routes earlier, perhaps Amtrak might have been avoidable until the floor fell out on airline pricing about six years later. Instead, the ICC forced operators to run empty, and track maintenance budgets aside, the expenses of running one or two crappy routes dragged down whatever profitability the rest of the system had. Probably not at all unlike those airlines who bid on and were forced to keep operating EAS routes.
But, back on topic.... if you wanted a pillow or blanket, you had to pay for a higher class of service.
