Why are major streets in urban regions not build tunnel like?

Cost, cost and cost. Just to put an example: Madrid (Spain) made a tunnelization of the M-30, a radial road that initially surrounded the city, but as the city expanded it became a street inside it. It took 3 years of massive works and 7 billion euros (about 8,5 billion dollars) to build the tunnels.

While the works have proven definitely useful, reducing traffic jams, contamination, and regaining surface for other uses (a big long park has been built on top) the people of Madrid is going to repay the costs for the next 50 years...

You have a vastly different definition of "liveable" than the rest of the planet. You have also not thought through the implications of your... I suppose "proposal" is as good a word as any.

Building tunnels to constrain exhaust fumes would not reducesmog. You propose:

Outlet at a suitable location.

Arguably, you might relocate the smog - when it is "outlet at a suitable location", it will interact with the sunlight to produce smog. That said, 1. Outlet at a suitable location is a political impossibility - I would pay to see you propose to the suburban or rural communities that they should accept urban smog. Your "solution" will ensure that both urban and rural locations are uninhabitable. Of course you might argue that the tunnels won't be airtight, so you're merely reducing the urban smog and increasing rural smog? Smog redistribution?

1, If you are diverting the pollution elsewhere, that means your new tunnel roadways are airtight. Which means that anyone driving in those tunnels is going to asphyxiate. Unless you're going to retrofit all cars with oxygen tanks and something to stop people from dying from the built up toxic wastes in your tunnels.

1. Heat death. Driving through airtight tunnels will trap heat within the tunnels; remember that cars propel themselves forward by generating a series of explosions. That heat has to go somewhere. Not worth my time to do the math, but I suspect that normal traffic would raise the temperature in these airtight tunnels to a level that would be fatal. I would not be surprised if the temperature rose high enough to generate a risk of fire in or near the acoustic baffles.

2. How will the cars drive? How do you get oxygen into these tunnels? Without oxygen, cars will not go - those explosions rely on oxygen.

3. Fortunately nobody will drive on these tunnel roads - not only would they die from the experience, but when they got to their destination, they'd discover that there was no way to get out of the tunnel to get to where they want to go. Unless you're building in a mind boggling number of airlocks?

4. Nobody wants to drive in a tunnel all the time. The claustrophobia of driving in a car with windows that look out on the smog filled tunnel would probably cause people to avoid cities entirely. Of course their rural farmland is now covered with smog, so perhaps your plan is to end all driving and return us to a pre-industrial age?

5. the incredible surge in accident rates caused because people cannot avoid debris, or cannot swerve to avoid other cars without hitting the side of the tunnels. As a separate exercise, consider the difficulty of investigating accidents inside your hermetically sealed tunnels, and how the accident debris will be cleared. Let's leave aside the interesting question of how you clean the thousands of miles of hermetically sealed acoustic baffles.

6. When the car stops in the city, what happens? is the parking garage inside the airlock or outside?

7. Your acoustic baffles might reduce the noise pollution in your city (empty of people because nobody can ship food in - but the noise will be contained in your new rat warren roadways. Noise is a form of energy - it doesn't get destroyed, just diverted. The roadways will be filled with a toxic level of noise as well.

8. You suggest this for "major streets" - implying that minor streets would be isolated by some kind of airlock. My mind boggles at the traffic jam involved in a car pulling off a major street for a minor street. And the amount of expensive urban space required for the airlocks - a parking space in an urban environment can cost as much as a suburban house.

9. Environmental cost - Let's ignore the environmental impact of trapping heat inside cities, and the resulting rise in air conditioning costs for the few, miserable starving city dwellers who must walk out to the edge of the city to get food because trucks can't bring produce in anymore. Let's just look at the additional energy costs involved in managing all the problems above. You've just traded some definition of "livability" for an increase in global warming that is probably larger than the total progress made by the USA in the last 20 years.

Please, before you post a question on any stack exchange, read the help center. H:SE specifically places out of scope speculation on alternative histories, and we've never needed to explicitly mention that alternative future urban ecologies are out of scope; we've relied on common sense.