Well having some undeveloped space is actually quite nice to enjoy in a city. We don't have to live packed narrowly on top of one another.
But more specifically, brownfields (previously-industrial spaces) are usually highly polluted. Some are full of heavy metals and chemicals that you really don't want to displace into the air by digging into the soil... Some people are doing it, but it either costs billions of euros in depollution, or greatly affects the health of nearby population, and often both.
It required several years of sanation works to clean up, but now it is built over and serves the needs of the population. [0]
I believe that this is a reasonable use of public money, even though private developers profit from it. Or possibly finance it through a Public-Private Partnership project.
The alternative is to let poisoned land within borders of a big city stay poisoned forever. Which does not sound either people- or environment-friendly.
[0] https://www.ostrava.cz/en/podnikatel-investor/real-estate/br...
Here in Prague we have quite a few brownfields that could be home to at least 50 thousand people (Rohanský ostrov, Bubny, Kolbenova), but the development is extremely slow.