We are at that point from a technology perspective - look up passive houses - but it's still far too niche an area. For new construction, it's actually not that much more expensive, and is also far more comfortable and energy efficient also.

First we have to get to the point where basic insulation and noise dampening are figured out. House quality is really terrible.

In the USA yes, especially the west coast. In Poland I was about to get a condo constructed but not doing that anymore, but the process was quite interesting. The insulation blew most everything in the USA out of the water. Mostly because they have no choice given the really cold winters. During the winter pollution gets really bad and if you shut the windows, pollution goes down indoors, but so does CO2. Ideally you have a hepa filter + outdoor A/C that brings in warm filtered air during the winter.

Noise dampening is still an issue. Where I'm living, the whole flat is subject to resonance, when old buses drive by. It's like living inside the throat of a bass vocalist. That, and I hear every laugh a child has outside, even though I'm on 7th floor (8th, if you count like USA-ians do). It's terrible.

Yeah. Stuff like high quality insulation, balanced ventilation and so on has been required in new homes in much of Europe for more than a decade ...