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"Old diesels"- I assume you are talking about the classic carbodied, bulldog nosed EMD F units that Lionel made popular for kids?As was pointed out well in previous posts, the F's were designed to haul freight, because that's where the money is in a railroad.  The FT's, the ALCO PA's (which the New Haven used to haul freight when they weren't running passenger cars), and similar were excellent replacements to haul main line freight, of all kinds.  They weren't so good at switching, because of visibility issues.  The attitude was that the railroads had specially designed switchers that could do the job.I've been in the cab of a late model F unit, and my two biggest complaints about it is this: you can't see behind you worth diddly, and getting in and out of the thing is a bear.  That doesn't matter much on a haul where you are going in one direction between point A and B, and your trainman doesn't have to leave the cab to throw a switch.  It makes a big difference when you want to see your trainman behind you as you back up to make a connection.  And it makes a huge difference to the guy who's constantly up and down that miserably narrow, vertical ladder.  The road switcher gave the train crews a safe place to stand and gave engineers the ability to see them.But when they first hit the road, they were head and shoulders above a steam locomotive from nearly every perspective except dramatic looks.  And looks, alas, do not pay the bills.The second generation of freight locomotives addressed the problems of visibility and maintenance, as well as cost.  I read an interview with the designer of the lowly GP, and he said that he wanted a locomotive that would work on branch lines and was deliberately ugly.
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