According to The Power Broker, Moses liked grand visions and held poor people in contempt, because he thought he knew what was good for them.
Rehabilitating the subway is not a new, grand project. It also would‘ve primarily benefitted the poor people in a way contrary to his visions. Finally, it would‘ve competed for federal money with his precious highway projects since the federal government would be reluctant to allocate too much money to one region. So the subway had all the things going against it, in Moses‘ opinion.