Diesels *can* exceed 125 mph. But notice I used the word "convenient" several times. Power requirements to overcome aero drag increase dramatically with speed, but there are limits on how big and heavy locomotives can be. Power requirements for speed above 125 mph with a typical passenger train exceed what's practical to produce with a diesel - not impossible, but practical (which means, in part, affordable to buy and maintain). So most conventional (diesel) passenger equipment and locomotives are designed for 125 mph because that happens to meet operating needs outside true HSR or the NEC.

Several non-electric (e.g. non-wired) high speed trains *were* built and used by Amtrak and its predecessors, and in Europe (remember the UAC Turbotrain that ran NYC-Boston, and the Turboliners that ran elsewhere for Amtrak?), and they worked, but they used fuel-sucking, high-maintenance gas turbines to get the power density needed. As practical devices (i.e getting significant repeat orders), they failed, at least in the US. 125 mph is a good compromise speed for car-competitive service on only slightly better than normal freight tracks, too, not requiring extreme upgrades to the basic railroad.

Brightline operates at "up to" 125 mph on a portion of the run that's mostly grade-separated and out in the country. In the built-up area, it runs on upgraded freight tracks with normal 79 mph speed limits. Amtrak has a couple of lines in the Midwest that have been upgraded for 110 mph, with some grade crossings. Those are all within the capabilities of standard passenger locomotives and equipment, which makes them economically practical.

BL West will be electric because it will be faster, competing with not only driving but with some air travel. Because of the power demand, it has to be all-electric, even if it were not in Zero Emission Now California. They can use standard HSR trainsets given their relatively low speeds (peak around 180 mph, usually lower due to grades) compared to CAHSR. They're also designing to make a profit, which makes a difference in equipment needs.

Another interesting comparison can be seen in the NY area, where dual-mode locomotives are used for some commuter trains. Most are (and were) basically diesels with limited electric modes for use in the tunnels accessing Penn & Grand Central terminals. The ALP-45DP that NJT runs are a little more capable, producing up to 3600 hp (less with HEP on) on diesel and up to 5900 hp (5360 continuous) under wire on the NEC. The different limits are essentially a compromise for fitting both a diesel engine/alternator system and the electric power system into a practical locomotive (weight and size) carbody. And they Aren't Cheap - but they're cheaper than having to change locomotives (or force passengers to change trains) for trips from non-electrified territory into downtown NYC.