What everyone forgets is that the land was worthless to the US government until the railroad was there. By having a transportation system built it allowed farmers, loggers and ranchers to get their product to market. The government was then able to reap the benefits (taxes) from increased commerce. The government still kept half the land along the right of way to sell or do with as they pleased. The land granted to the railroads also became taxable even if it wasn't being developed. The railroads sold off most of the farmable land as quickly as they could to recover the costs of building the ROW and to get customers to use the railroad.

Another part of the land grant deal was the government also got reduced rates for hauling government loads. This part of the deal wasn't dropped until after WWII. I have heard it estimated that the government recovered the value of the granted land 7 times over. Not too bad of a deal.