Maybe the Milwaukee Road would never have been "net profitable"; it might have ended up needing state support, as many railroads did (including literally every single railroad in the Northeast). Probably it would always have done worse than the BN -- I don't really care. But the management decision to keep the financially-worst parts of the railroad and dismantle the financially-best parts of the railroad is what doomed it to scrapping, rather than shortline or secondary line or mothballed-by-UP status. The management actions would be analogous to Penn Central dismantling the Water Level Route and the Broadway Limited Route while retaining all the commuter branch lines -- but Penn Central knew better.
Maybe you didn't understand what my point actually was. Since I've made and proved my point, but you seem to think I was arguing something else.
My point is they scrapped the part of the railroad they should have kept, while keeping the part they should have scrapped, largely because their accounting was all wrong. It would be very desirable if Amtrak did not repeat this mistake.
Well, if you think actual operating expenses of the Milwaukee Pacific Extension compared to that of the competition is irrelevant, it is no wonder you have come to the conclusion you have.
The accounting aspect is debatable, regardless of what you think. There are plenty of arguments both ways, so that's why the best measure of the railroad's viability is just to stick to the facts:
1. Unlike many Rock Island routes - many of which were in worse shape than the Milwaukee - were acquired by other railroads and upgraded. Strong routes survive. The Pacific Extension wasn't and didn't.
2. The argument that "they kept the part of the railroad they should have scrapped" is not born out in history. Thirty-nine years after the abandonment of the Pacific Extension west of Miles City, most of the railroad that was retained east of there continues to be used today. Of course there are small sections of track that were abandoned since 1980 east of Miles City/Terry (and even some retrenchment of the few lines which were kept west of Miles City), but overall core routes in South Dakota, between the Twin Cities and Chicago, Chicago to Kansas City (with some modification), and other routes in Iowa, Wisconsin, and Minnesota remain intact. Their continued presence after 39 years proves that people with foresight knew they were worth keeping, and they are.
3. The supposed "profit" of the Pacific Extension completely overlooks what would have been needed to keep the railroad viable if it was profitable. The millions of dollars needed to rehabilitate the deteriorated infrastructure notwithstanding, if a company is to continue into the future, it must have infrastructure to allow it to compete. Lack of CTC, power switches, signals, lineside inspection and warning devices, and lengthening of sidings were just some of the things that were needed to compete. Without addressing these important shortcomings, "profit" is relative and irrelevant.
4. Someone like you might say that it's all about accounting. Someone like me might say that operating folks were looking ahead to pending deregulation and how high cost routes would be even at a greater disadvantage. The facts and constants of the history of the Pacific Extension are that its horrible profile and circuitous routes always made it the high cost route - an untenable situation.
While I totally get your frustration with Amtrak accounting. But there is no intercity rail passenger service alternative to Amtrak. There were better alternatives to the Milwaukee Pacific Extension so the Pacific Extension is gone and the rest remain. Complaining about alleged accounting shenanigans and mismanagement can't overcome these facts.