It seems that digging cost is pretty minor when compared to the usual cost of these projects.

As far as safety, I would expect this depth to be below and away from any groundwater, so even with a meltdown there would be no effect on water sources. Presumably if something like Chernobyl happened they would bury the hole and the fuel would just melt its way further down without ill effect. There were plenty of underground nuclear tests already so some of the effects might be understood in practice as well.