...I do think that there is an additional problem that too many people selfishly choose to drive even for journeys that could easily be made by public transport. You can see this clearly in central London. Places like Trafalgar Square, Covent Garden, or in the vicinity of Oxford Street and Regent Street are invariably totally clogged up with - from the look of it, mainly taxis and private hire vehicles...
Taxis and PHVs have an important role to play in an integrated transport system.
In the years before Congestion Charging was introduced I regularly walked along the streets you mention, as well as those in the City and further West. My conclusion when people said Congestion Charging would make a big difference was that it wouldn't, because a high proportion of traffic in the zone was buses, taxis, PHVs and white vans. All of which have exemptions or are being used because there is no practical alternative. Private car use in central London was already quite low, and a significant percentage of those there were would be exempt or discounted (Residents, Blue Badge holders, Low-emissions) and others were being driven/used by people whose wealth means only an outright ban would have any significant impact on them.
One of the reasons there are a lot of taxis and PHVs in central London is they are popular with tourists. Residents and commuters get used to public transport systems and like them. Visitors and tourists often don't understand how they work and see taxis and PHVs as an easier option, especially with luggage or children.
Another factor is that when bus congestion reaches the level it has on some central London roads (it really is quicker to get off and walk) then taxis and PHVs are attractive because they aren't fixed on a particular route and can dive off into the back streets to get to the destination quicker.
London's black cab industry has a powerful voice, but it (along with the PHV one) is backed up with strong support from the public and business. Eliminating black cabs in London would have a damaging impact on the tourist industry (and the City).
...But for short orbital journeys, there is a pretty good bus network -
In relative terms (compared to most of the UK) it is fairly good, but it all depends where you want to travel to/from and the proximity of those places to rail stations. It doesn't take much before a journey into the centre on one rail/tube line and back out on another is faster than taking an orbital bus.
...the problem again is that most of these buses are too slow because of the congestion caused by too many cars.
I disagree. The buses tend to be slow because the routes are designed to meet many competing demands, they have to stop to allow people to get on and off, and London has a great many junctions and pedestrian crossings.
If we take an example of a North London orbital bus route - the 251 - there are few places along that route you are likely to encounter significant traffic congestion and there ought to be bus priority measures in place at all of them. The worst part is probably going to be Burnt Oak to Edgware along the A5.
If we take a shorter section of the route - say Arnos Grove to Mill Hill Broadway - TfL give an off-peak journey time of about 40 mins. It would be about half that by car, 39 mins by cycle, and 49 mins via King's Cross (including a generous 12min walk from tube to TL). With a daytime 251 bus frequency of 9 to 12mins it doesn't make the bus the most obvious choice.
There's also a problem that the flat Oyster bus fare of £1.50 is pretty off-putting if you're only going a mile or so.
It is a lot better now it is for a 1 hour journey than it was per boarding. If you needed to do a short journey with a route change part way it was a massive disincentive. But in real terms I don't think a £1.50 bus fare is extortionate in comparison to the cost of providing the service. That is a hard issue to solve and only gets harder the more extensive you make the bus service.
To me all this speaks of the need for imiproved public transport and much stronger discouragement of driving (eg. through a much more extensive and higher congestion charge, and making more roads bus/cycle only and removing or charging heavily for most parking in city centres and retail parks). You'll never get a decent sustainable transport system with most people using it by only doing one or the other - it has to be both.
Although this makes sense in theory, in practice it isn't going to happen.
It hinges on what you define as a "sustainable transport system". If the requirement is to provide a bus/rail system which comes close to the convenience and flexibility of the private car then the system will have unsustainable costs and environmental impact. Otherwise people are going to have to accept a step-change reduction in their expectations when it comes to mobility and their choices about where they live, work, study and how they spend their leisure time.
The real answer lies in a blended/integrated transport system where people are incentivised to use the most appropriate mode of travel for their journey. That won't come about through the demonisation of cars.