Latent demand does exist (not "induced", it was always there!) but it isn't infinite. There's a point where you could actually have enough supply. They just don't want to spend that much money and knock down that many buildings (give up Manhattan's density), so they say it wouldn't work.
Demand is only limited by travel time. The amount of traffic will rise to the maximum amount of time people are willing to endure reaching their destination.
There is real value in that.