All too true. Rail Trains aren't used by real cyclists. They are used by newbies, kids and the infirmed.
That said, there is a huge market of casual/infrequent/prospective cyclists who'd like to do more but "it's too dangerous". Part of the reason the Otago Rail Trail is such a huge success is it's long enough to be a mutli-day challenge, but easy enough that pretty much anyone with the desire can do it.
In NSW I think there are two or three outstanding rail trail opportunities. The best one is Goulburn-Crookwell. Varied scenery, decent facilities, rail line completely useless and unrevivable (it was useless in operation!), good public transport access. But most importantly it's 2hrs from the largest market in Australia with a complete absence of such facilities. At 50km it's a fraction short.
Murwillumbah to Lismore also has potential, but IMHO would need to be connected to the Gold Coast with a similar standard facility, but preferably all the way to Brisbane (there is sort of a bike route/path some of the way already). That's a multi-day challenge through a developed tourist area and it will attract more visitors.
The third is the New England bike route. Today, that is potentially Armidale to Warrick. 400 odd km putting it in the Otago Rail Trail category of facility. But it could easily be Armidale to Toowoomba if the Dirrimbandi line bites the dust. And if the Inland Rail project goes head, much of the formation from Toowoomba to Ipswitch will be available. I know an awful lot of ducks need to line up here, but there is the potential for there to be a Brisbane - Tamworth route, and that would be an international attraction.
Crockwell to me is going to be limited success
- 50km long, scenic, 2hr by car from Sydney, 3hr by train, Crockwell is a reasonably serviced town, O/N return at Crockwell.
- Nothing along the route with regard to facilities, nothing beyond Crockwell, only the fitter will do a day return, need to back track from Crockwell to get back to car/train
Murwillumbah line, should prove fairly sucess
- Location on edge of Gold Coast and 80min drive from Brisbane, start from Condong is only 15km from Kingscliff and I'm sure a low cost off hwy bike track could be built, regardless its not the main hwy anymore, plenty of towns along route for O/N or other facilities, public transport for return, potential for GC train to terminus, ride from there to Casino and return to Brisbane via XPT (or vice verse)
- hot humid climate for the summer, GC line terminates at Varsity Lakes, needs to get to airport, limited daily return on XPT and weird hours.
Note: no need for bike access to Brisbane and impractical anyway.
Northern Tablelands - Yes would be very popular
- Scenic for many parts, lots of towns along route, is quite long (400km) and hence a holiday destination on its own, public transport access to Armidale, not humid, camping along ROW, Granite Belt is popular tourist attraction on its own
- Line from Toowoomba to Warwick still open, once closed due to Inland the RT could achieve its full potential and enable access to rail based public transport (assuming Westie still running or commute service started), hot summers
Agree with comments to the existing range crossing to Rosewood if it was also closed and released.
The later two options to me are the best bet and to achieve their full potential both state govts need to pull there finger out and get the facilities along the route, signage, international promotion, PT connections etc etc. I'd also throw in Gundagai - Tumut - Batlow and to make it a loop Tumbarumba to WW branch as well, but need to find a way to deal with the 30km gap between the two termini. Not sure if there is enough of the old alignment to Kunama from Batlow available to be recovered as this would cut out about 5km off the hwy to Tumba, but facilities are very limited and Batlow maybe more worthwhile.
Tassie's NE line is also idealic.
But to make any of them as successful as the Otago line, you need support services. Transport operators to take you back or to the next destination, facilities, shops and accommodation along the route etc etc. If there is nothing there, there is nothing to support the RT and nothing for users to spend money on.