Definitely this is what was happening mid-century (when indeed everyone else was ripping out their tram networks entirely).

But I think if you look at modern light-rail projects there really has been such insane cost-inflation it wouldn't be worth covering the city with trams even with a much bigger budget. Also because such a large fraction of the price is admin etc., it creates a bias towards more expensive infra (heavy rail) because the paperwork overhead is similar either way so you get more bang for your buck.