We do not have this in Chicago....It is not a bad idea....perhaps, USCIS and State Dept....should add option for N-400 applicantion to automatically apply for US passport. It is a good revenue source for government, it streamlines the process, as USCIS already has all data one needs for DS-1 application.
I see several problems with a single application solution (N400 denials, pp fee changes, N400 delays causing pictures to become older than 6 months etc.), but here is no good reason that Dept of State can't have an authorized person collect the passport applications at the Oath ceremony as they do in San Francisco.