[ctdonath]

particular small areas with extremely high pop density might improve if cars were banned

Cars, on the whole, occupy a single flat level. Why don't buildings spread out over roads as the norm? rather than the occasional oddity of a road tunneling thru a building, why isn't that the norm? Ventilation etc problems can be solved. There's N stories of unused space over the roads; leave the first 2-3 stories for road tunneling, and fill in the building-sized empty spaces above.

[electricblue]

Probably because it's prohibitively expensive compared with just building a larger building next to the road and it's aesthetically pleasing to have space between buildings and humans like sunlight.