The downside is it creates a conflict between the city and the rest. The city is like "we want transit, everyone else go away". The rest are like "we want to give you business but your policies drive us away", and "we want transit, but we are forced to get a car because transit is only in the center".

It's an unnecessary conflict - just add some transit that doesn't revolve around the city center. This reduces the number of people just passing through the center and creating unnecessary stress, and it make transit possible for more people.

Manhattan is like a black hole - it sucks in every single transit from as far away as Massachusetts. Try to travel by public transportation from virtually anywhere nearby without going through Manhattan. You can't and it's unnecessary traffic.

>I think it would be a lot nicer to have urban life/transit built around many smaller cores with everyone living much closer to work. but in aggregate, businesses want the largest hiring base, and people want the best jobs they can get in the area.

I think that this is prevented in large part by local capture of state politics by leading cities. NYC money basically owns NY politics so NY will never neglect let alone screw NYC to the benefit of Buffalo and Albany and whatnot. Repeat for other states that have one or two big urban economic wells that run everything.