Private transportation is subsidized just as much as public transportation if you factor in the cost of all those eight lane interstates. It's all a matter of priorities.
I'm not saying that rail travel is a better solution... I'm just pointing out that no matter what way we go about it, the government will spend significant amounts of money. The Federal Budget allotted $67 billion for transportation improvement projects this year.[1] Add to that a huge amount spent by the states and local jurisdictions (I know my state roughly matches it's Federal grants with it's own money.) Contrast this with Europe, which spent 125 billion euros on road projects, and 73 billion on rail subsidies, and has three times as many people.[2]
You can't end a debate on rail travel by saying it's not profitable without subsidies. Roads would not happen without massive government subsidies either. Witness the need for the Eisenhower Interstate project to kickstart decent long distance highways in the 1950s.
Air travel benefits from the same things. If airlines had to build their own airports, ticket prices would be much higher. The airlines benefit from billions of dollars spent annually by states and municipalities to build nice airports, add runways, and run air traffic control.
All that comes out of your taxes too.
[1] http://www.dot.gov/affairs/dot1507.htm
[2] http://reports.eea.europa.eu/technical_report_2007_3/en/eea_...