(I just checked for "Munich to Berlin next monday": 120€ cheapest for trains unless I want to sleep in them, 105€ for a flight, with more choice of time.)
> Even if we assume two hours for arrival, boarding and an hour for local transportation in Berlin, flight would still win on price.
It is 50€ if you look for the Monday in 2 weeks. For quite a bit of my travel, I am booking 2-3 months in advance, and it is usually around ~30-40€, first class, for a 600km trip. (This site is quite helpful: https://bahn.guru/) Some other things to consider: Trains (ICE) are substantially more comfortable and "freer"; you can walk around, don't have to pretend to listen to a safety choreography, keep your data on the whole time etc.
Trains also don't restrict the amount of luggage you can take with you. In fact when my grandma died, I transported a ~2x4m persian rug by ICE, and while I got some comments on it, and switching trains was a pain, it was a very cheap option for a poor student with a big rug.
On another note, there will be a 9€ Ticket for summer in Germany that allows you to use all non-high speed trains within Germany, which will be a really interesting experiment.
Trains are nice if you need to transport anything of volume, especially bikes, if you stay longer than a day or two so you can amortize the travel time, if you have lots of run-up time, and probably cheaper if you travel a lot. They're definitely competitive, it's just not a slamdunk, and planes do straight win sometimes depending on requirements.