First, the cable would have to be buried deep enough where temperature fluctuations are minimal. If the temperature is allowed to fluctuate widely enough, the cable would be subject to expansion/contraction stress and could then fail. Overhead lines wouldn't have this same issue since the catenary shape of the wires allows room for this expansion and contraction -- solid earth doesn't.

Secondly, if it is buried deeply enough where temperature isn't much of a factor and something fails, now you have to dig that much further to get to/repair/replace the wire. Add on top of that the dead of winter and the rural rights of way that these buried lines would likely be under and that's another big mess.

Keep in mind I'm just speculating here. I'm no expert.

There is a mix of submersible transformers and those that can handle water but can't be submersed in the city. The former are usually placed in areas that are prone to flooding, they are much more expensive than a regular transformer since they are basically waterproof and have a number of extra features built into them so they require less maintenance.

In Manhattan proper, the worst enemies of the underground network are salt + water and the build up of gases. Salt and water + eletricity = corrosion which leads to burnouts. There has been a significant move to try and preemptively visit underground vaults and clear them of the salty water after a snow melt.

Most underground cabling is enclosed in an oil filled casing. Over time these wear and leak. Those gases can fill the underground transformer vaults and lead to explosions. These events are usually pretty well documented and again, ConEdison has been putting procedures and inspection routines that help prevent these.

What is amazing about the Manhattan and Brooklyn networks is how resilient they are simply by the simplicity of design. A transformer outage in a certain area can go almost completely unnoticed by citizens because of the control centers around the city and how they will reroute power. It's something that doesn't exist just about anywhere else and allows crews to isolate issues and perform maintenance when needed.

Every time it rains heavily, the water table rises temporarily, in low-lying areas. It's not a flood, but it swamps things that are underground. If an earthworm would drown, a cracked junction box would leak.