I am increasingly convinced that the appeal of streetcars and light rail has everything to do with class. From any rational perspective, these systems make no sense -- they are 10-100x more expensive than buses and lack the flexibility that buses have to adjust to shifting demand patterns over time. A single extra lane of highway adds more capacity than any light rail line.
Streetcar's single, solitary advantage is that middle and upper class whites who would not be caught dead on a bus seem to be willing to ride streetcars. I don't know if this is because of some feature of the streetcars (they are shiny and painted pretty) or if it is some sort of self-segregation (the upper classes want to ride on something that is not filled with "riffraff").
Anyway, Reason has a really good video on streetcars, which covers a lot of topics from cronyism to the class issues I mention. And the film of the incredibly poor design of the DC streetcar has to be seen to be believed. (via Maggies Farm and their great daily links page)