"Conversely, why is this effective in Iraq? Can opposition forces not build tunnels or lay ladders over these walls?"

Walls create an impedance. Building a tunnel is a lot more effort (time, equipment, labor, etc.) than walking in. Employing a ladder is exposure; ladders are really hard to conceal.

People that claim a border wall is necessary and will be effective, such as the National Border Patrol Council, the union of border patrol officers, aren't actually ignoramuses. They don't believe or claim a wall is a perfect passive deterrent. It is a force multiplier, and like the Sadr City wall, will be effective while it is patrolled, maintained, etc.