The public largely abandoned long distance heavily govt subsidised passenger rail thanks to low cost airlines in the early to mid 2000's. When I moved to Gladstone Qld in 1998, there was at least one long passenger train a day to/from Brisbane + daily return and sometimes 2x return Spirit of Cap. It was very common to get to Brisbane by rail. Flights were only taken for short weekend trips, they were largesly expensive, only 4 flights each airline in a plane with something like 20-24 seats.
Spirt of Cap was replaced by RTT around early 2000's with much fanfare, full Business Class full bookings etc.
Within 5 - 7 years the whole market was completely different thanks to cheaper airline tickets and lot more seats.
- The long haul loco hauled pax trains were half their size and when you booked them, EC seating was often near empty.
- RTT had dropped the full silver service BC to just BC seating
No one I knew would even dream of taking train to Brisbane.
In addtion significant imporvements to the highway reduced driving and doing a weekend drive to Brisbane was seen less of a drama.
Yes rail thrived breifly when Ansett collapsed, but brief is an understatement. Running daily trains from Sydney to Adelaide would be nice in my train focused world, but would be a money pit of biblical proportions.
GSR phased out the cheaper seats through lack of demand, I don't see anything changing soon.
Perhaps they could have capitalised on the current global airline issues running the odd train, but I doubt people are ready to pay full non subsidised fares in sufficent numbers.
As for Sth Govt supporting CAF through to Adelaide? The same govt who stopped funding the Overland?