The whole point of capitalism is to create competition and through competing a better standard is produced. It is fairly obvious that with trains there is no competition in play you don't get a choice of trains you get one route, one train.
Some may argue that there is competition because train companies bid for contracts with the government. This is nonsense, this isn't capitalism. The government aren't the consumers, and so doing this to try and simulate some form of competition is a joke.
So that gives us two options we either create a true free market whereby the government has nothing to do with rail, or we can nationalise it.
Net state subsidies of £4 billion last year.
I think capitalism doesn't really work with the railways. If you let capitalism run loose on the railways, everybody would go by car, the railways would cease to make a profit and hence would cease to exist (or would become freight-only, like in the US [with few exceptions]). I'm usually fairly libertarian, but maybe a bit of statist force is necessary when it comes to things like this (just a little!). If state ownership of the infrastructure could be shown to improve fares and service quality, I would have nothing against it. The European railways are less expensive and run better (apparently), and yet are nationalised.
I agree that the current system is simulated capitalism, not true capitalism. It contains many elements of the worst from both the worlds of socialism and capitalism.
State sponsored capitalism never works, in any sector, because government and the free market are two diametrically opposed concepts.
Governments always want to make things better for themselves, so they piss about with the market, setting regulations and laws, each of which make the market less and less free. The right especially like to shout about how awesome free markets are, while also peddling policies that make the market less and less free (like immigration control).