Don't lay it all on Perleman. Yes, he was the poster boy later on but there was a long history before he arrived on the scene. For example, consider Mr. Pyeatt (Pres. D&RGW 1924-36) who was not a big fan of the narrow gauge. Lots of others too.
As to Donald Foster's comment (re std gauging & dieselization,) I suspect, from inspecting the figures in the 1938 BL report & the 1948 NG report, that dieselization and some minor improvments in the 1940-1950 period would have been enough to keep most of the lines profitable on a covering costs basis but would not have made anything like enough profit to cover the cost of capital. So, in the interest of the stock holders, it was the proper business decision to invest in the mainlines and let the branch lines, including the narrow gauge lines, go away.
Now as to how to balance the public interest in transportation vs the stockholders interest (and right to?) in profit, that is much longer, and more controversial, debate!
hank
ps given a time machine and enough $$ I'd be more than willing to go back to the 1930's and give it a shot, but I wouldn't expect to ever do more than break even on the project.