Musk's a sales technique to promise the moon (Mars really) and then use the cash to build a revolutionary but realistic company.
SpaceX isn't going to colonize mars, but its putting satellites in orbit.
As absolutely insane as his goals are, betting against him overall tends to be a losing bet. I'd be careful about what you think SpaceX "isn't" going to do. If it is technologically possible, they will do it. Period.
And X.Com didn't become Paypal. Paypal became Paypal. Paypal was already developed before the merger and it was not Musk's idea.
Next up: Elon's Space Elevator! Elon's Fusion Reactor! Elon's Teleporter!
(I'm kidding)
No, it's a hellacious mess of rocks of different types, of muck of all kinds, of brittle, water-filled pockets of who knows what, and every inch you dig you find out there's another problem up ahead.
In the case of Seattle they planned, they surveyed, they did test drilling, and they plotted a course that should have avoided everything, yet they still managed to slam into a steel pole that shouldn't have been there. It set their project back months, the machine was trashed and had to be dug up and fixed.
Plus, these tunnels are only part of the package. You need those surface access lifts, and those may well be the most logistically complicated of the whole system. To make this accessible you'll need hundreds of them, potentially thousands, and each one is a mega-project unto itself if you've sunk the tunnel down deep enough to avoid all those hazards you're now digging straight through.
The deeper you go, the more those lift stations cost. The shallower you go the more you'll come into conflict with infrastructure. There's no easy win here.
Sending rockets to another solar system would be cheaper than the tunnels depicted in this video. I'm not even kidding.
Where is all that material going to go? There's so many tunnels there you could build a small mountain with it. Maybe he can team up with some sea-steading outfit and build a small continent off the shore of San Francisco.
You'd need three or four orders of magnitude reduction in tunnelling costs to make that anywhere near affordable, and even then you'd still have unbelievably complicated logistical issues. How much concrete do you need for those tunnels? What about ventilation? Safety procedures? Flood control? A single one of those could cost upwards of a billion dollars and I'm not sure there's a lot of cost savings by doing more of them, the complexities don't scale that way.
The more you dig, the more you're likely to hit something expensive you're going to have to pay to fix.