I don't think Intercity rail is entirely futile. I share a train with several hundred people heading to and from Sligo (well at least Longford) every day and there are no great population centres on that line. If a reasonable service is provided, people will use it. It's just that for now the airport is better served by bus from Sligo and most other places in Ireland.
I'm not suggesting that an airport link is a cost-effective use of infrastructure investment and it simply wouldn't work without DART underground and extra tracks north of Connolly at least as far as where the airport spur splits off. But there is obviously a turf war going on here. It's probably more a case of Irish Rail not wanting to see this going to somebody else than a case of them wanting it themselves.
In terms of investment for maintenance and improvement of existing infrastructure, it is a sad fact of life for everything in Ireland that it is far easier to get state funding to build a big new shiny thing than it is to get it to pull the weeds and fix the holes in something that we have already.