You have given the best advice of all. If Lionel received a couple hundred railcars from angry owners, with demands for refunds, they may think about fixing the issue going forward.
About 15 years ago, I bought a new GE Microwave. It was terrible. It lasted about 3 months, and then just quit.
The so-called warranty only promised repair or replacement. I wasn't interested in either.
So, I wen online, and found the name and address of the CEO of GE. I packed up the microwave in its original box, and shipped it straight to his personal office in NY. I enclosed a note, saying that since I paid for this piece of junk made by GE, he could at least take the time to haul it to the junkyard.
I never heard back, of course, but I smile just thinking about that big box sitting on his desk when he came into work one morning, and the laughter and gossip that would be spread by his secretary throughout the building at lunchtime.