A dynamic light needs dynamic shadows to properly obscure it. The graphical engine currently has no dynamic shadows, and is not likely to get them. An entirely new graphical engine has been talked about briefly in the past, but this is a huge task and requires separating the game from the renderer. The two are currently tied up in each other, as that how it has always been in Arma.
Street lights are static and so do not need dynamic shadows to avoid shining through other static objects like walls.