Everything old is new again.
As to why it's not currently done, if somebody comes up with a significantly lower cost method of doing purely underground construction (cut and cover trenching), directional drilling or small tunnel boring that doesn't cost a huge amount of money per linear meter, they'll become a gazillionaire. Not just "loops" but all electric, gas, water, sewer and telecom utilities will clamor for the tech.
Musk has been long mum on the subject but he recently said, at a National League of Cities event in Los Angeles on 2018-11-08 , that's he's open to the idea.
Of course, the big issue with tunneling, and construction projects in general, is often utility relocation, and not necessarily knowing where other utilities and surprises lie ahead of time.
 https://www.forbes.com/sites/alanohnsman/2018/11/09/its-not-...  https://arstechnica.com/cars/2018/11/elon-musk-on-double-dec...
Whats funny is when I was twelve years old - I designed a magnetic lev train built in a balsa-wood frame circle, with a cabin which was suspended in the tube-frame...
I was really pissed when Musk came out with hyperloop in that I was like "Any twelve year-old can design this!"