Former tunnel boring engineer here.
This is true, but the real elegant solution is to build everything closer together by an order of magnitude, thereby raising the number of destinations in an N minute walking radius and eliminating the need for tunnels. If your urban design depends on cars-in-tunnels, it's a "code smell" that you've made a grievous system-scale architectural error.
We should keep building cities the way people did for thousands of years, with mostly little 10-foot wide (building-face-to-building-face) streets and a very few larger boulevards. This is how Venice works. This is how Tokyo works. This is how lower Manhattan works, and it's awesome. LA's streets are probably ~100 ft between building facades, on average, so we could infill a bunch of little narrow streets of buildings in each one, raising destinations-per-acre by ~an order of magnitude or maybe more.
This destroys demand for transit by inspiring a modal shift to pedestrianism, and now you have a much smaller problem to solve. You can take all the tax revenue from the new buildings in your newly-densified city, and the money you saved on paving/traffic lights/street upkeep, and use it to build a real 12-trains-per-hour, quad-tracked, express-and-local service, 24 hour subway. Elon's Boring company can dig the tunnels for these if you want.
If you have money leftover you can build through-core commuter rail, that comes from the northern suburbs and goes through downtown out the other side to the southern suburbs, with a one-seat ride. If you still have money leftover you can give it to the homeless or something; under no circumstances should anyone ever spend money on putting cars in tunnels, which is one of the all time dumbest ideas and a prodigiously ugly solution to a prodigiously ugly problem.
To do that, first you need to forget about all best practices and problems that have been fixed and issues regarding quality of life and even safety.
No one bothers building little 10-foot wide streets because that's an appalingly bad idea. Slums aren't known for their quality of life, and no emergency service can pass through 10-foot wide streets.
You're a former boring engineer talking about issues that you know nothing about.
That's what we have in Europe and it doesn't solve anything.
I only works when the size (diameter) of the city is small. Then a single point in the centre of the city can irrigate the whole city. And a point to point transportation between the centres of several such cities is highly efficient.
But cities have spread, so now the problems are the same as in the USA, except that when the city keeps repeating the same pattern of density while spreading, it makes those problems even worse (infrastructures are more saturated, because there are more people using them and because they are smaller and rarer). Dense or not, your job is nowadays unlikely to be in the same part of the city and generally not in the same suburb either.
There is no benefit in having density on a wide area. What worked when the city was built (or slowly developed into) and was 1-2 km wide was challenged when it grew to 3-5 km wide, and stopped working now that the city is 10-20km wide.
The denser the area, the slower the transportation: be it cars, buses, trains, bicycle, foot, whatever: everything moves slower in dense areas. And there is only so much that happens to be closer and more or less compensates the loss of speed. The rest suffers the density slowdown penalty in full.
I very often read Americans here, who write the same thing you did. It sounds like you all think there is a magic bullet: densification of your suburbs and suburb-like urbanisation. Let me tell you that if you densify this way, you won't solve anything, you will even make everything worse, for you will concentrate more people everywhere around the centre, in a neverending slick of density, and all those people will need or want to commute to other neighbourhoods daily, and you won't be able to offer efficient mass transit for most O-D in those newly densified areas.
You often have a rose-tainted view of European and Japanese urbanisation. Problem can have a different nature, or a different reason, but they exist as well and are as important.
My take is that the only people who ever claim that it's a bad idea happen to be US citizens who have been conditioned to see a car as a sort of extension of their own body and even a social tool, and don't have any first-hand contact with working mass transit systems operating in urban areas.
The rest of the world knows that a working mass transit network greatly improves quality of life in multiple aspects of everyone's life. Anyone who experienced the metro system in cities like Berlin or Paris or Madrid, with a city-wide network criss-crossing the city with stops every 300-500 meters and trains passing by each 2-10 minutes, knows that it works well and does wonders to everyone's life and even personal disposable income.
I assure you there's a lot of people like me.
By the way "citizens who have been conditioned to see a car as a sort of extension of their own body and even a social tool" describes me, half my friends and most of my colleagues pretty well.
"US citizens", "don't have any first-hand contact with working mass transit systems operating in urban areas" don't apply so much to us. We're consultants and I assure you. We have first hand experience with mass transit systems in every EU capital, half the US state capitals, and a lot of others.
And none of them match having your own car. Most of us have a choice taking mass transit systems or doing an hour plus of being stuck, going almost walking pace, on the highways. When traveling public transport tends to be the easiest to find, more reliable and quickest way to quickly get to your hotel. Taking a car into a plane, while possible, is sadly not within budget limits for travel. Taxis are, but opinions are divided on them. I think they're generally more trouble than they're worth, and they make you miss all the stuff you want to look at.
I suppose my main reason is that I can actually shop where I want, and take useful quantities of food, supplies etc plus all my work stuff home with me. There is no way to do that with public transport. Aside from the comfort, this actually saves a lot of money, and more generally even allows for more economic opportunity (due to reasonable and speedy access to more goods. I help organize a music mini-festival. That's not doable without a car, mostly because I can go get needed things quickly).
Second reason is that while public transport, where it works, only connects the spokes with the hub. It does not connect neighboring small cities in any useful way, if at all. Even if public transport has connections, they run 4-5 times per day. And they're mostly empty, so every time the public transport bigwigs play with the schedule (every 6 months in France) we live in fear (or my kids do anyway), if the connection will still be there or they won't be able to visit their friends.
Public transport is -barely- tolerable to connect people to their jobs. It is unusable for almost anything else. Not even for regular groceries. Not for going to IKEA and get some furniture. Not for having a party at a friend's place. And so on and so forth ... And please don't start the argument that it's cheaper. It is not, as soon as you consider how much more a car lets you do, and that public transport just isn't a replacement.
Electrical bikes help. Or at least, they're better than bikes and sometimes more useful than cars.
The kind of low to mid-density area that can support everyone owning a car is not the kind of high-density area that can afford to pay billions of dollars for high-speed car tunnels.
If you want to use your car, use it outside of the city, don't displace housing in the city so you can park your car for the 22 hour a day you're not using it.
I may find it very convenient to drive every where in my 40 foot motorhome so literally all of my stuff is with me at all times, but that's not going to happen.
Then you walk or take a train there?
You may say "But my area doesn't have good transit", but if you're going to spend billions of dollars building relatively low capacity car tunnels, you could spend those same billions to build higher capacity transit.
The car only offers a certain type of freedom. When you take a train (or cab) from work to go across town to meet friends for dinner/drinks (since you don't want to drive during commute traffic or try to find parking in a busy downtown), why should you have to make that same trip all the way back to your office just to get your car so you can drive home? Just hop on a train from the restaurant and go directly home.
At least that was my biggest discovery when I first moved to an area with good transit -- without the car I had a lot more freedom to go where I wanted and didn't have to structure my activities around where I parked my car. Also I didn't have to pay for (and protect) a $20,000+ car and the transit pass was less than the monthly car insurance alone.