But when there are multiple competing forms of transit, or high externalities caused by use (or overuse) artificial disincentives are optimal. As an example, if you have access to both a car and a train, and the car pollutes less than the train, some artificial incentive to only use the car when necessary and to use the train otherwise is actually optimal.

You're also, it seems assuming that investment is a one-time thing. Once an investment has been made in a train line or a car, you still need to afford maintenance over the thing over the lifetime of the thing. Including the opportunity costs of doing other things instead.