This isn't true - Miller in his first term pushed subway expansion, but couldn't get any traction, other than the Spadina extension. In his second term he got the Spadina extension moving, and started the Downtown Relief Line studies, pushing the province to commit to including it much earlier than originally planned.
Transit City didn't preclude subways ... it was a focus on suburban routes and existing streetcar infrastructure, where subway capacity wasn't necessary. The one exception was the Don Mills line south of Eglinton, where they made it very clear that they were evaluating other technologies, and as the study advanced, it became clear that even the stretch from Eglinton to Danforth was going to have to be something higher than on-surface LRT.
Miller's mistake - if any - was pushing Sheppard subway extension during his first term, rather than switching to LRT earlier.
The subsequent delays by the McGuinty government, and the complete incompetence under Rob Ford are what set transit expansion back.