Not to mention the horizontal space they demand everyone else dedicate to parking, so "their" on-street space is always available.

This is so bizarre. I knew I wanted to keep my car, so I filtered my search to apartments with parking available and factored it into the rental price in my comparisons. My building's garage has pretty high occupancy - the demand is there. It's unclear why the developer would need to be legally coerced to add parking, when the market demand is there. And if the market demand isn't there, what's the point of an empty parking garage?

Primarily because people who were in the area before the developer made the apartment came to consider the on-street parking "theirs" and didn't want to share it with newcomers. It's a very inefficient allocation of space, not to mention a burden on the taxpayer to make everyone else purchase private automobile storage because you wish to have exclusive use of public automobile storage.