Why would running trams in the middle of the street, rather than bus service have led to that result?

Perhaps you should take a peek at this article and read how public transit did evolve in the land of your youth. https://www.citylab.com/transportati...ransit/568825/

Of course you are still free to imagine that none of it is true and that trams would have continued to successfully provide convenient public transit to the commuters of the U.S. as if it were still 1918.