newenvironment: error with \begin{align} and \end{align}

This is caused by the way LaTeX environments are defined. The simplest way around is to use \env...\endenv construction instead of \begin{env}...\end{env}:

\documentclass{book}
\usepackage{amsmath}
\newenvironment{subalign}{\subequations\align}{\endalign\endsubequations}
\begin{document}
\begin{subalign} 
    a&=b\\
    &=b
\end{subalign}
\end{document}

Define the environment using environ:

\documentclass{article}

\usepackage{amsmath,environ}

\NewEnviron{subalign}{%
  \begin{subequations}
  \begin{align}
    \BODY
  \end{align}
  \end{subequations}
}

\begin{document}

\begin{subalign} 
  a &= b \\
    &= b
\end{subalign}

\end{document}

To provide different approaches under same question, this is a xparse solution, using the b-type argument specifier.

\documentclass{article}

\usepackage{amsmath}
\usepackage{xparse}

\NewDocumentEnvironment{subalign}{b}{%
  \begin{subequations}
  \begin{align}
    #1
  \end{align}
  \end{subequations}
}{}

\begin{document}

\begin{subalign} 
  a &= b \\
    &= b
\end{subalign}

\end{document}