Exactly. We have airplanes for cross country travel. The train technology that exists in other countries could make even Boston to Toronto doable.
Not in my experience. I took Amtrak from Atlanta to DC in 2008, and it was basically a 13 hour flight -- same kinds of seats, only marginally more space, and the food service amounted to paying exorbitant prices for awful sandwiches that could have been vended from an office machine. I would prefer to spend 10 hours in an airport and 3 hours in flight, given the chance; airports are at least quite comfortable, in general.
The times I've taken Amtrak (mainly for amusement value; Seattle-SFO and SFO-DEN), it was mainly old people (many of diminished mobility), some religious groups (mormons? menonites?), and foreign tourists. And mostly empty seats.
Amtrak is expensive because it's expensive. It bills its sleeper service as a luxury thing, and charges luxury prices. There's nothing to say that it has to, or that anybody who decides to compete with them has to.
http://en.wikipedia.org/wiki/Couchette_car
proper sleeping cars where you have your own private small room are a lot more expensive.