You're exaggerating the population density. It definitely wasn't hundreds of thousands per street! Some figures here: https://urbanomnibus.net/2014/10/the-rise-and-fall-of-manhat... And it's worth pointing out that the peak population density in walk-up tenements was still well below what can be accomplished with tall modern day residential apartment buildings.

No one is saying the tenements were desirable, or wishes for them to come back. What we want is the construction of more dense residential housing that can meet or exceed that population density while providing good quality of life. Said construction is entirely possible, doable, and profitable, except that zoning prohibits it in most places.