Re your points, now:
The thing is, Reagan is a very different person TTL. With 40 years of divergence in play, the development of politics has gone somewhat differently. Reagan's molding himself less off of Richard Nixon in terms of intended policies and more after Nelson Rockefeller. And while President Kennedy does play a role in increasing Transit funding in the 1960's, the Kennedy increasing that funding is not John, but his older brother Joe Jr.
I really doubt it would make thaaat much of a difference. The Reagan victory over Carter is very vulnerable to butterflies coming from the hostage crisis, but little else is. To wit:
Postwar America had an elite consensus regarding the Cold War, race, economic policy, urban policy, and social policy. This consensus alienated many groups, both marginalized (women, blacks) and not so marginalized (ideological conservatives), leading to protest movements. Foreign policy was still governed by the Cold War Liberal consensus, which led to Vietnam; since the US was fighting a limited war and North Vietnam fought a total one, the US lost. The abuses committed during Vietnam led to a loss of trust in government, which led to Watergate and its aftermath. Carter was a reaction to that. Reagan was a reaction to Carter. Carter was identified with environmentalism and conservation, coming from the response to the oil crisis; Reagan was a reaction to that.
Moreover, Reagan embodied right-wing populism, which is strongly pro-car because Cars Are For Normal People. In Europe, too, national conservative and right-wing populist parties are pro-car and anti-transit. Thatcher had her famous utterance about bus riders being failures, but even in Switzerland, the SVP is against rail and for roads.
In a two-party system, nothing but right-wing populism else could unify the various center-right and right-wing forces, which include conservative-liberal, religious, hawkish, and racist elements, each of which thinks nasty things about the others. This is why we see the same politics crop up in the UK, Canada, and Australia. In Israel and France, we see somewhat of the same politics: the system allows more parties but the national politics clusters into two blocs, left and right, promoting populism in the right. French conservatives are more pro-rail than Anglophone ones, but their support of rail is limited to the flashy TGV, while they ignore the legacy network; and moreover, in France, both Chirac and Sarkozy come from a conservative-liberal or Orleanist tradition that positions itself in opposition to right-wing populism, which is stable because the two-round voting allows right-wing voters to vent frustration by voting FN in the first round. In Israel, too, there's an outlet for right-wing voters, and as a result the Likud rhetoric on economic policy emphasizes anti-populism more so than the rhetoric of the GOP and the British and Canadian Tories. But even in multi-party, multi-bloc systems, there were middle-class backlashes against policies aimed at helping the poor; for example, the backlash in multiple European countries, such as Germany, against comprehensive education.
The upshot is that there's no plausible way an alt-Reagan would've acted like Rockefeller. Rockefeller and his wing were very much the elite consensus of the 1950s and early 60s. That was dead, dead, dead. The welfare state seemed discredited because of rising crime (which was an inevitable result of job losses in inner cities due to urban renewal), the US felt humiliated on the international level after the inevitable Vietnam defeat and the oil crisis, and the stagflation that resulted from overenthusiastic guns-and-butter policies vindicated monetarism. With very different circumstances, within the span of a few years the UK elected Thatcher, the US elected Reagan, and Canada elected Mulroney.
Other than the hostage crisis, the only part here that's vulnerable to butterflies is the exact timing of the various failures of the postwar consensus. In OTL, the domestic policy regarding race failed first, leading to civil rights marches and then to the growth of the welfare state. This meant the Vietnam defeat happened on the watch of domestically progressive Democrats, which led to liberal fracturing and to the Nixon backlash. I guess you could do an ATL in which Vietnam happens under Nixon (r. 1961-9) and then Humphrey or someone like that gets to play liberal savior in 1969, but in such an ATL, stagflation and the oil crisis still happen and someone, Reagan or otherwise, gets to play conservative savior.
While you do have a point here, I think there are a few ways to get around this. Namely, bringing in Public ownership earlier could save some systems, or at least get them to the point where the Federal cash spigot opens and it's. Another one I'll talk about at the bottom.
I really doubt it would do much. Public ownership did not in fact make anything more efficient. I remember reading somewhere that US transit productivity steadily improved until public ownership; I do not remember the source, and it could have been Wendell Cox, so caveat emptor. If it wasn't Cox himself, it was a paper citing him on something.
What public ownership did was take over the large financial losses on postwar public transit (which mirrored prewar losses, but the transit operators could no longer use transit as a loss leader for property development or for electric power distribution). It didn't save anything. The subways and most of the els would have survived either way. The streetcars remained unpopular with drivers. Rob Ford even campaigned on killing the streetcars, but 2010 isn't 1955 and a Canadian mayor isn't as powerful as an American one.
Yeah, I think we'll do away with that regulation. (And others too)
How plausible would it be given a midcentury POD?
Essentially, the Federal Government decides to turn the technology used for BART into a "new standard" and effectively strong arms other cities building new rapid transit systems at the same time into also using the technology. And the 50's are actually a lull in terms of Transit investment, between a wave immediately after the Second World War, and another one starting during the Kennedy administration.
...why? This is reinventing the wheel, and imposing unreasonable constraints on cities coming solely from the small profile of the Transbay Tube. Nobody needs this. The US reinvents the wheel a lot when it comes to importing foreign technology, but in a midcentury POD, there's no importing; it's all continuous improvement of existing tech. No real reason to turn BART into a new standard when there exists the Red Line/BMT/IND/etc. standard.
No, by the present day it's Frequency and Reliability problems that are generally given as the reason. But between 1950 and 1990, the Key System was generally operated under the idea that it was going to be a Stop-gap until things like BART and later HSR made it obsolete. By the time both were done, there was too much public support for Rail service over the Bay Bridge for a tear out to even be considered at that point. Similar ideas take place in other American cities TTL, slowing down and eventually blunting entirely the Streetcar apocalypse.
Is this OTL or in the ATL? In OTL, the Market Street Subway was built concurrently with BART (and nobody cared about HSR until the 1980s). In the ATL, unless you're delaying the BART opening somehow, either the Key System drops the second BART opens, or the planners decide to be smart. In the latter case it's intentionally second line across the Bay, trading speed for the ability to branch and run in streetcar mode outside the downtown cores, and allowing BART to run to destinations other than Market Street and the Mission without branching too much. The idea that excessive branching is bad because it cuts frequency is very new, in popular discourse due to Jarrett Walker, but the concept that a subway shouldn't branch too much because of capacity reasons is apparently decades-old common wisdom among New York subway railfans.
At the risk of wanking:
Alt-subway-surface would be an interline of Muni on the Market Street Subway, roughly as in OTL except without Third Street, and the Key System in Oakland, serving multiple destinations in the East Bay such as Berkeley and Richmond. Then alt-BART would have a Y-shaped core, with a line going from each leg of the Y to the other legs, so that each leg can host full capacity of trains. One leg would start in the East Bay and cross the Bay to stop at Embarcadero and Montgomery, with cross-platform transfers with alt-Muni-Key. A second leg would go west along Geary. A third leg would swerve south to connect to the SP terminal and go along Caltrain. Each leg would have branches with less frequency: the Transbay Tube leg would branch in the East Bay roughly as in OTL but taking over commuter lines instead of running incompatibly with them, and the Geary leg would branch into an Outer Richmond line and a Golden Gate line taking over what is now SMART. The SP leg might not branch at all, or if it does it would be into a branch along the old mainline to Daly City, roughly along the route of BART today, and the current mainline using the Bayshore Cutoff.
Yes, the Y is wank-y. Yes, it's probably not something they'd design in the CBD-centric 1950s, because the route from the SP leg to the Geary leg skirts the SF CBD; plausibly it would not be a Y but a Transbay core with an early split into a Geary and an SP branch. Yes, the SP connection might require a larger and more expensive Transbay Tube to allow for the full height of mainline trains; plausibly it would run trains the same width as the mainline but with lower roofs.
And as for the short-list of cities that will keep their Streetcars TTL, that didn't OTL:
-Los Angeles
-San Diego
-El Paso
-Kansas City
-Chicago
-Detroit
-St. Louis
-Minneapolis
-Baltimore
I'll focus on LA: the Red Cars were a loss leader for property developers. They lost money the entire time, and LA was moving away from them during the war, once it grew into areas not served by the trains. It was already a car-oriented city in the 1920s because high income + low density + very fast population growth with relatively limited urban transit; according to Owen Gutfreund's 20th Century Sprawl, it achieved the critical threshold of 150 cars per 1,000 people first, IIRC in 1920. This created strong political pressure to get rid of the Red and Yellow Cars to give more room to drivers.
Postwar America is not the 2010s. Alt-postwar America could be pro-transit with a judicious POD, but it would not be what we recognize today as transit activism, interwoven with livable streets. The concept of human scale did not exist then, and urbanites were too disempowered to fight off urban renewal until it was too late.
About the best you could do is delay urban renewal in a few cities and then have the programs canceled when their failure in other cities was visible. This, according to Jane Jacobs, is why Canadian cities did not undergo the equivalent of white flight: Canada lags the US in social trends, so by the time its cities got around to building urban roads and urban renewal projects, the neighborhood activists had already learned the tactics of the freeway revolts. (She said what happened was that the failure of urban renewal in the US was evident, but I don't think it's quite true - after all, American urban power brokers still think urban renewal works. It's more likely that the protest movements underlying the freeway revolts just spread to the US earlier so they were more mature when the cities planned their freeways in Canada.)
However, LA was a large, rich city with a pro-road political culture. It also was built on an explicit rejection of the culture of both New York and San Francisco. It's implausible for the freeway revolt movement to be mature in LA when the Interstates (or their equivalents) arrive. In OTL, LA took longer than the older big cities to have freeway revolts (I believe the first was against the Century Freeway), although once they came, the more difficult political environment made it easy to slow down freeway expansion.
