They were gifted the land when the land was close to worthless because the transport costs for western products were higher than their value. The train is what made western land valuable. That land had value before the train came through was almost pure speculation -- people bought and settled land assuming that it would have value once a train arrived.

It was a real subsidy, but it was small and it was > 100 years ago.

OTOH, the land the freeways and roads were built on already had significant value before it was expropriated for road construction and wasn't paid for with diesel tax revenue, so it's yet another subsidy for truck traffic.