The short tunnel wasn't inherently the problem. The lack of space everywhere around it in that area was.
You have Ellesmere Station at ground level underneath the Ellesmere overpass and beside the railway alignment. The line then needs to dip under the railway, requiring a vertical separation of approximately 20 feet. Then after crossing, the line needs to not just climb from that negative 20-ish feet back to ground, but climb another 20-ish feet in order to pass overtop of Midland Ave. - and do it far enough away in order to allow for a vertically level alignment in order to build Midland Station.
And all this needs to happen in 600m of alignment.
Maybe they could have eliminated Ellesmere Station to allow the decent further to the south, but there are still very, very limited options with which you can thread a rapid transit line alignment through there.
Dan