I love railroads. Old timey steam locomotives are one of my favorite inventions ever. If I were a retired emtpy nester, I'd probably convert my basement into one of those museum diorama quality model railroad worlds.
In gaming, the so-called "benevolent railroad" is fine, I suppose... but where do you draw the line? I mean, have you ever been in a campaign where half a dozen very reasonable (and clever) solutions to a given problem were shot down "just because" and the adventure wasn't written that way? I have.
Sadly, I've been that DM too often. I run a lot of modules, sometimes because I'm asked (my playgroup started because a couple of friends asked to be run through the Return to the Tomb of Horrors, converted to 3E), and other times just because my prep time is limited. The group understands and at least geographically tries to stick to the module just out of deference to reality. Every once in a while, they'll throw really wacky things at me though. The first couple of times I just had no idea how to handle it and had it either fail or do nothing productive without much feedback to the player, and I could tell it was frustrating for them (not so frustrating that they stopped playing, but still).
I've gotten a lot better since then (I think), at least in part because of the 4E DMG (I know, people are probably tired of hearing about how awesome skill challenges and p. 42 are, but the concepts there, along with experience, has really helped me think about how to structure and scale challenges on the fly, even in my 3E game). Sometimes the wacky idea just doesn't work, but usually it'll at least seem like it failed because the PCs aren't good enough (yet) or the enemy took precautions that stopped it, rather than just "umm, that doesn't help".
There's a fine line between the players' "responsibility" to buy into the game that the GM brings to the table, and the GM's need to let the PC's do things their own way. The two endpoints are railroads and sandboxes, and in my opinion, exist only in theory, not in reality. But head too much in the direction of a railroad leads to very frustrated players after a while. I'd submit that your example game isn't really a railroad at all; it's right at the ideal point where players and GM are on the same page about what the campaign is about and what everyone should be doing.
That's a pretty good sum-up.