I think it's inherent once a system gets large enough. As the size of a transit system grows by a factor of n, there will be O(n2) different kinds of trips that people need to take.
This is obviously wrong as shown by functioning public transportation systems in large cities like Berlin, with busses, trains and undergrounds every 5-10 minutes. The transport system isn't organized as a complete graph, but instead looks something like a powerlaw distributed graph. The diameter is still small, but the number of lines stays linear.
I think it's only true up to a certain value of n. Once the mass transit system has a subway system that has a train every 5 minutes and stops at most a block from any given location, it makes very little sense to drive. When I visited Hong Kong, it felt like this -- massively convenient and efficient. No time wasted looking for parking under $20/hr.
The network doesn't need to be n-to-(n-1) - it can't be "ride to this single central hub and wait an ungodly time for a connection", either. Looking at my city's public transit, I see a dense interconnected network - denser the closer to the center you get - with branches and leaves off the edges; rapid, high-bandwidth transit (underground rail - with stops relatively far away, but still more or less walking distance, from each other; plus normal trains with stops every few klicks) and slower, smaller forms of transport with stops closer to each other (light rail and buses). It's fairly efficient - I can get within walking distance of almost anywhere with 2 transfers, and anywhere with 3 (with transfer times <5 minutes); it outperforms cars on many trips (what with congestion and whatnot). Alas, it gets about 70% of funding from city subsidies, so extension and maintenance is a huge pork-barrel issue.
I live in Vienna and there are few I can't reach within the city within about half an hour (buses/trams/subways often come in 3-5 minutes intervals too).
Within 45 minutes practically the whole city is covered.
