I see these tunnels as somewhere in between traditional roads and a subway or bus. The cost seems like its way too high to justify. Maybe only worth it in the worst traffic areas where there is no land for more roads.
I don't think the Tesla tunnel has any benefit over any other system (it's basically a worse airport people mover). But I think Elon is thinking 3 steps ahead towards his Vegas Loop, an idea that while still a bit too handwavey for me makes more sense. It's basically a road system underground, but fully automated. I'm still iffy on how I like the idea, but it's clear that this is Musk's vision, and the tunnel is perhaps a small path towards that.
It seems like the factors are the cost per mile, time to build, and people per hour vs a subway system. All need to be weighed to have it make sense. Obviously they can't employ people to drive you in Teslas either. It's only worth it if I can drive in with my car and drive out the other end. If it is 10x cheaper, can we build 10x the number of tunnels to achieve similar results? I really just don't know yet.
Something else that's worth considering is whether this scales. I'd expect a loop like the Las Vegas Loop to be somewhat larger to deal with concerns with ventilation and evacuation, something this loop doesn't have to deal with yet.
I think we also want GoA 2/GoA 3 capable cars, which should be easier than FSD and be achievable by Tesla in the short term. Driving manually through small tunnels is not for everyone, and even with guidewheels, I think automation is pretty important for this kind of system. The technology to realize these loops in the way Musk wants them isn't quite there yet, but I'd expect them to be here soonTM.
For instance, Mayor Francis Suarez from Miami noted that TBC quoted $30 million for a tunnel under the Miami River. In comparison, the Miami-Dade County transit officials estimated a $900 million price tag for a tunnel about 2-miles long for the same project