Well, How are the Minecarts gonna go the right direction if someone or a mob gets in the way and then, its gonna be a whole trainwreck? I believe it would, unless you put a fence on both sides.. 
Or if you made it a subway.
also there's tricks to avoiding collisions, for example you lay 2 tracks 1 block apart 1 for each direction and lay signs every 25/50 blocks with signs showing the direction.
Not to mention have a train hub that auto dispenses minecarts going in the proper direction, could even hook up a publicl dispenser to a bud switch that opens a door when you deposit a minecarts
The part no ones considered yet is creating a hub to control which city you go to
since its stupid to make a new rail for every city to city connection you would want a centralized line that you could branch off of to each city.
But then you're stuck with the dilemma of doing a tree traversal around the track until you reach the city you want which may take hours depending on where the city is
Or creating some kind of switching station that stops you long enough to pick the proper track and you would need to be on to get where your going
meanwhile you now have either
A) a subway that you can't see anything from so what's the point "hey look a piece of stone"
Or B) an above ground rail with a minimum 2 block high wall to stop mobs creating a barrier that spreads out across the map
Not to mention all this time there's been a /home <name of city owner> that coul've gotten you there instantly..
Don't get me wrong I like the idea of a rail system, it would go great just below the clouds so that you could see the area around you
But the idea just isn't all that feasible without giving someone creative mode which won't happen since that goes against what the servers about which is SMP
