Traffic congestion increases nonlinearly[1]. i.e. the 10th car on a road has a smaller effect than the 100th car on the road. Accordingly, the cost of increasing a bus' size and decreasing its speed pales in comparison to the value derived by removing 5-20 cars from the road.
But there have to be 20 people inside the bus (approximately 50% utilization) for that effect to be seen. Do you see that many on the bus at non peak times?
Realistically a bus is 2-3 times the size of a car. I think you need like 5 people to justify it. And 6 before you're actively addressing traffic. Most bus capacity is around 10. Which is 4 cars saved.
Also, do you care about the state of traffic at off-peak hours? who cares if buses don't run at peak capacity when there's no traffic?
https://www.youtube.com/watch?v=cHSCmQnGH9Q