It doesn't have to produce much to kill you. Haemoglobin latches onto CO much more avidly than it latches onto oxygen, and it doesn't let it go.
Fat chance of reducing oxygen levels enough to make a difference.
Not much, but still quite enough to kill you eventually.
Your haemoglobin collects every last scrap of carbon monoxide it sees, and loses interest in bringing in oxygen and taking out CO2. You die when you haven't got enough working red blood cells left, even if there is plenty of oxygen around.
The air is foul because it has enough contaminants for you to notice.
It isn't foul because there's a big enough oxygen deficit to measure - if it were somebody would have measured it (though the tools you need to do it accurately aren't cheap).