Instead of the air resistance of a train-sized object (about a quarter mile long) you'd have air resistance equivalent to a train 300 miles long (think of the tunnel as an inside out train). It's inefficient by several orders of magnitude.
Wait, if the walls were made to be near frictionless, then the aggregate energy, minus what's lost to hear from turbulence, would be used for motion, right?
What I mean is that the energy wouldn't be lost. The turbulence wouldn't result in a net loss of energy, except that which was lost as heat through the walls (a 1cm layer of vacuum would insulate against that).
Totally wrong. All of that turbulence goes into heat, which must be sunk through the walls (or something else), and is therefore lost. "Fully turbulent flow" is a reference to the transition away from (low-friction) laminar flow. Flow gets to be fully turbulent by experiencing high internal fluid friction due to its own viscosity. Air's viscosity is low relative to water, but it still isn't zero. 500 mph flow through a big long tube is extremely lossy.