the main issue was not the technology change: it was the decline in transit service
At the turn of the 20th century, when transit companies' only competition were the legs of a person or a horse, they worked reasonably well, even if they faced challenges. Once cars arrived, nearly every U.S. transit agency slashed service to cut costs, instead of improving service to stay competitive. This drove even more riders away, producing a vicious cycle that led to the point where today, few Americans with a viable alternative ride buses or trains.
Now, when the federal government steps in to provide funding, it is limited to big capital projects. (Under the Trump administration, even those funds are in question.) Operations -- the actual running of buses and trains frequently enough to appeal to people with an alternative -- are perpetually starved for cash. Even transit advocates have internalized the idea that transit cannot be successful outside the highest-density urban centers. And it very rarely is.