- Streetcars of the time were very uneconomical and surprisingly dangerous. https://en.wikipedia.org/wiki/List_of_tram_accidents They were not very comparable to modern light rail.
- Upgrading/modernizing them would not have been as straightforward as people would think. Think SF's cable cars - everything was small scale, regional, and not-interoperable.
- GM et al establishing a trust was not about killing public transit per se, but locking in a profitable bus manufacturing and routes. Transit was still seen as a lucrative industry after the war.
- Regardless of the trusts, most cities (even in Europe) moved to buses anyway because the lower operating costs, larger number of riders, more flexible routing, and safety issues.
So while they did some shady crap, the idea that we would all be living in dense cities riding subways would it not be for some GM executives somewhere is probably not realistic.