Hyperloop would seem even _more_ plausible if we were able to lower the cost of tunnel construction. Likewise, traditional mass transit and other infrastructure (power, telecom, sewage) could be significantly cheaper with improved tunneling technology.
If Elon Musk wants to spend--or convince others to spend--billions of dollars innovating tunneling construction, then I'll enthusiastically support whatever vision motivates him.
It's like if a kid decides to clean his room so the aliens can land their spacecraft, then by all means, let's get ready for the aliens!