Earlier quoted context omitted.
You're right that track circuits are simple and relatively reliable, but they are also inefficient. Having to retain sufficient safety margins while being unaware of the real location of trains means that there is excess "dead space" in each signalling block that could be used to drive more trains over the existing infrastructure. It's what happens with systems like the DLR in London, which uses an advanced moving bl…
Few railroads run trains that tightly spaced. The London Underground and the NYC subways do have that problem, and they've both been cautious about installing newer train control systems. The London Underground's Victoria Line has a modern system, and it's been troublesome.[1] The enthusiasm for GPS-based systems comes from low-traffic railroads with a lot of track per train. Their maintenance cost for trackside equi…
A strong argument in favour of computerisation, however, is that the worst delay caused to trains in service as a result of these types of failure was 30 minutes long – with the mean average delay time across all 700+ automated system failures being just five minutes.
That is amazing. Bear in mind that the Victoria Line runs over 30 trains per hour in the peak! I don't feel that "troublesome" is an appropriate description.
In the UK at least, a large number of railway routes really are constrained by the safety margins required for trains. In the late 90s, when the West Coast Main Line was upgraded, there was an abortive attempt to implement a modern moving-block signalling system – but it was predictably too difficult for such a complex line.
I don't doubt that you're right about the incentives being different on low-traffic lines though. It does demonstrate that there are various benefits to more automation that need to be traded off against the complexity, cost, and rust of failures.