Joe, while I agree with your sentiment it was of course not that simple. People in the city of Bloomington did call for the rerouting/removal of the Monon through the downtown starting immediately after the end of passenger service (I wish I could share the articles), but the abandonment of trackage and McDoel came from the railroad not the city. And the closure of RCA was also not a city supported move. The French conglomerate which took over RCA was not interested in a Bloomington plant, despite city government efforts to keep it.
The Indiana railroad's mainline does bisect the city, but much of it is, as you know, above grade level and poses less of a disruption. The city government, like most midwestern towns, wants rail connection and industry, but i don't think they will be any more successful at attracting it than anywhere else right now.