I wouldn't say that at all. I would describe it as the opposite, an unregulated hellscape.

They build and maintain their own tracks at their own discretion except when the public steps in to fund a particular project. There are rules about operating their right-of-way... many of which they have a standard practice of completely ignoring and nobody does anything about it, especially when it comes to the law that they give passenger rail preference.

They mostly can set their own prices, with only market competition controlling what they set them to. The STB is pretty toothless even when there is a complaint of anti-competitive behavior.

Outside of a small number of high-volume passenger corridors, they have complete freedom to set their own schedules. In the last decade, they've started increasingly operating trains unscheduled and calling it "precision scheduled rail". In actual practice, PSR is just running the longest trains they physically can and having them leave the yard exactly when they're full and not according to any clock. They theoretically need to show right of way to passenger service, but their trains have gotten so big and long that they are physically unable to show right of way and so they just don't.

The mandatory safety rules are pretty minimum, especially when compared to things like air travel. Enforcement of Environmental Protection rules and post-incident safety reviews are pitifully enforced.

They're also the only private industry specifically exempt from the NLRA. Just the rail industry has a largely weaker set of worker protections than every other American gets.

I'm sure I could keep coming up with more examples. But as far as I've ever seen, the only thing stopping them from expanding service is an unwillingness to do so. Regular Old Market bullshit short-term financial goals are preferred even if they are not sustainable and long-term sustainability is unacceptable because it would hurt short-term financial goals.

The industry doesn't really need more regulation though. Because what it needs is nationalization, at least of the track and ROWs.