They are still more expensive than planes and there are fewer connections available, often not everyday of the week or only during certain times of year. But my biggest issue is that train companies don't work together internationally so that there are no "official" connecting trains. You basically need to book them separately and if one is late you are screwed…
Don't get me wrong, I like night trains and I use them, but there is still a long way to go to make them competitive against planes.
As someone who traveled from Germany to Italy by train and had a delayed austrian train:
There is an agreement between most european rail companies, that the next company will update your ticket if your previous one was delayed.
And the italian train company updated our ticket to a later one, because the austrian train was delayed by an hour and it was all booked online with DB. (the german train company)
That‘s cool! I had the issue come up multiple times. Once booking a DB -> ÖBB night train through DB, which they didn't "view" as one ticket although it was one purchase. Eventually (7 month after the trip) I got compensated for the DB ticket I had to buy, because I missed my night train. But there are also private night train providers like European Sleeper, where you can only book tickets through their website. I don't think that DB cares about them.
I'm generally against night trains. They only work well when you can get on just before your normal bedtime, sleep undistributed for 8 hours and then get off. That means you lose one great advantage of trains: all the places you can stop on the way.
Mean while night is always going to be low demand so it is the ideal time to shutdown one of your two tracks (assuming two tracks, which isn't always a given!) and do maintenance on it, thus ensuring your daytime trains are more reliable.