The 1" of diameter = 1 MPH rule of thumb does give you a good idea of the connection between the size of the driver and the speed an engine can go - but like all "rules of thumb" it's not meant to be precise, just a general estimate.
One big limiting factor on speed is the track and ballast. A train going 100 MPH can pick up ballast stones and fling them around in it's wake, potentially not just endangering people and objects near the track, but could even hit the engine and train itself.
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