Like many surface lightrail systems, the total length of Muni trains is limited by the intersection spacing of the surface streets it operates on, among other factors - the train needs to be able to stop without blocking adjacent intersections.
Full double-platform operation of Muni trains on the Market Street Subway has been on and off over the years with changes in station operations and controls, I believe it is currently on at least at Embarcadero. There have been technical (related to the ATC) and procedural problems (people waiting at the wrong position and having to run) that have made double-platform operation tricky. I also think the gains in efficiency by double-platforming are fairly modest since the throughput of the Market Street Subway has long been limited by signalling considerations.
It's kind of wild that that wasted space for MUNI underground is not a bigger complaint in the main. My fantasy is that the last 20 years of tunnel computerization for MUNI was going to result in multiple trains per station, or hooking multiple lines together at the entrance of the tunnel (IIRC they did this with the Boeing trains until the Meltdown and Bredas) in order to utilize the whole station length.
Or shrink and simplify the MUNI parts, there's no (apparent to a rube like me) reason MUNI stations have to be the same length as BART stations. Make 'em a single block long with NYC style foyers: attendant, turnstiles, ticket machines. No flowers, no coffee, no Jehovah's Witness tables.