I confess, I'm not sold on the benefits of streetcars over buses or subway. But it seems to me that if you're going to buy streetcars, you should go ahead and build the damn streetcar route. Unfortunately, the District's efforts in this direction are a comedy of errors.
First, they bought streetcars that work on overhead wires, only to be told that they can't put overhead wires in much of DC. Then they repeatedly changed the routing, having somehow failed to notice that the company they were buying the right of way from didn't, like, own it. DC's master planners then laid out a route which was conveniently barren of disgruntled residents, but also of potential passengers, given that it had a freeway on one side and a massive airforce base on the other. Now they've got a halfway sensible route for the Anacostia streetcar--but of course that means opposition from residents who hate construction and like driving their cars. ETA for the first segment of Washington's once and future streetcar system has now moved back from 2006 to sometime in 2012.
Libertarians like to hold up these things as examples of how government can't do anything right, but of course, New York managed to get a whole subway system built with government involvement. Tthough the actual development was done with what we would now probably call a public-private partnership, New York City's government managed to help pick routes and get the proper right-of-way to get them constructed for an entire subway system in less time than DC's government will have spent launching a 2-mile streetcar line in a not-very-populated area.
Not all of this is the DC government's fault, exactly--the legal and political culture is now heavily stacked against that kind of rapid government action. But the endless, ridiculous fiddling around, the buying of streetcars that can't be used in much of the city, and other follies are pure bad government. Government is, by its nature, bureaucratic and inefficient. But not this bureaucratic and inefficient. DC is possibly the worst-governed city I've ever lived in.