IME they're an improvement but no where near as good as separated rail. It's like building a 32 lane highway, it speeds up most of your trip but then 90% of it is spent at the exit ramp.
Underground would probably be an improvement for travel times but I'm not sure how much, part of the benefit of trams is their frequent stops so being completely unimpeded is less critical. I doubt you'd see the same level of retail build up along the lines too.
One option I'd like to see return through the CBD would be elevated lines, I'm not sure why they fell out of fashion.
Yes, the busways in parts of Brisbane are really excellent, better than any tram line I have seen. But they are also huge pieces of infrastructure that take up even more space (and I suspect money) than the a tram line would have.
Which is probably why they only extend in one direction from the city.
Dedicated lanes is the biggest factor. Plenty of trams don't have dedicated lanes, in which case the significant cost premium is a complete waste.
Buses can also have dedicated lanes with right-of-way. The ones I've been on in Mexico and Ecuador were quite nice. While I personally find rail more comfortable and also appreciate how route permanence effects property values, as a taxpayer even dedicated lanes and right-of-way don't justify the costs.
Historic lines are a different matter as the initial capital costs are already spent, and even if they cost more to operate it can still make sense. So it does suck that old lines were destroyed. But if you're gonna build new, I just can't abide paying the ridiculous premium for rail unless they're going underground or otherwise grade separated for a significant portion of the line. But if they're grade separated then by definition they're not really trams.