Can't build it from Allara St because it'd be at the wrong orientation, and 500 metres doesn't leave a lot of room for a 30k seat stadium and all the necessary infrastructure around the stadium.
Besides there's no world in which Parkes Way is turned into a tunnel anyway, so the premise is complete nonsense as you've got to fit Parkes Way in as well, which means you've probably got closer to roughly 350 metres to work with.
All you need in a location for a stadium is for it to be relatively easy to get to, ideally as central to the population as possible, in an area with good public transport links and parking options, restaurants, entertainment, and accommodation within walking distance. In theory that could be achieved in any of the major city centres in Canberra (Civic, Woden, Belco, Gungahlin, Tuggeranong, and in the future potentially Molonglo as well), though undoubtably some would be better options than others.
You say that we need to do it right, and that a smaller stadium or one outside of Civic wouldn't be right, but that is blind idealism. In the real world you have to make compromises, and in this case that means that if you want the stadium in Civic you have to accept a smaller stadium (realistically 20ishk), and if you want a bigger stadium, one that actually fits the city's needs, then it must be built outside of Civic unless you can convince the Feds to give up part of Commonwealth Park or ANU to give up the southern part of the Turner Parklands and find a workable solution for building over Sullivans Creek, both of which are highly unlikely to happen.
Chucking a tantrum about the reality of those circumstances will not change them.