Here's the huge list, based on a wide variety of factors....
I for one am interested in hearing about the factors rather than just see a list of railroad names. Now I try not to use the term "favorite" because there are so many factors in what appeals to me most. Having spent a few years in Manhattan, the NYC Subway holds a place in my heart. But as a rail-fan, I am especially interested in trains (and perhaps more so models and virtual) as a time machine. I'm not talking about the one Marty had in the movie, but the ability we have to step in the past as we can here in Trainz or some hobbyist's basement.
I would rather live someplace where snow is rare or never seen, in a major city, but I live in Alaska instead. However, I can find something great about Alaska - the railroads, past and present. It is not just the ARR and the WP&YR - both of which are incredible tourist destinations. The ARR may be the only combined freight/passenger line left in the USA, complete with flag stops! The narrow gauge WP&YR starts in Alaska, and then quickly rises over a mountain pass into British Columbia (Canada) and the Yukon. It is purely a tourist railroad now.
But even those have a rather fascinating past. Perhaps one day I'll get to ride the Kenai loop in Trainz - that would be something! I could take the train down to Seward now, but the loop was gone before I was born, and I'm in my early fifties! The WP&YR was one of the pioneers of container shipping - again, long before I was born. It was tied closely to the brief gold rush at the start and then extensive mining in the Canadian Yukon, and it played a large role in the construction of the AlCan highway which was part of the railroad's demise.
With a such a rich history, beautiful mountain scenery, many engineering masterpieces, and the ability to still ride much of the original line, the WP&YR ranks among the best in my opinion.
However, I'm personally toying around with the idea of modeling the CR&NW: Copper River and North Western. This RR no longer exists. The last of the track was salvaged around when I was born. I was started in 1909 in the port village of Cordova and went through mountains, past glaciers, and along rivers to the interior of Alaska near McCarthy. It was completed in 1911 at a cost of $23 million. It contained some impressive bridges along the way, including the "Million Dollar Bridge", which actually cost $1.4 million. The railroad operated from 1911 until 1939. It was a popular tourist destination of the time, and branch lines were planned to other points within interior Alaska.
The branch lines never happened. The main reason for the railroad was the mines almost two hundred miles down the line at the terminus: Kennecott. This was the second-longest railroad ever in Alaska. Over $200 million in copper was pulled from the mines before they shut down in 1939.
Temporary (decades) fix to "road" that used to be a railroad:
Today, the rail is gone. Much of the right of way and bridges have been turned into a limited use road or, in some spots, more of a rough trail in the summer. Cordova is a small fishing village, Chitina is a tiny village barely on the road system, and Kennecott is a very far-off tourist destination. The Million Dollar Bridge collapsed during the 1964 quake, and only temporary repairs were made to the limited use road. It was decades later before they really fixed the bridge, and that was more for the environment than the road.
Temporary (decades-long) fix to "highway" from Cordova to Chitina: