You are probably talking about a Cafe Car, not a Dining Car. A dining car is (was) a fully self-contained restaurant. This move is essentially replacing that with your stale bagel vendor.
Last time I rode Amtrak (2016) the food was fairly good. Not exactly a five-star restaurant, but much better than airline food.
Definitely. I rode the California Zephyr earlier this year and really liked the dining car. The staff was great and the food was decent. It wasn't the best meal ever, but it was definitely my best meal in a moving vehicle. And I liked the structure the fixed dining hours gave to the day. This change seems like a loss to me.
I always hoped to ride this train some day and try out the dining car.
I used Amtrak a lot in that era and I've never seen that.