I'm reminded of Innuendo Studios' statement about porn: what becomes standard is not often what the majority wants, but what a minority wants and the majority will tolerate.
Developers optimize for developer profits. They know a bigger house will sell for more than a smaller one, so nobody builds smaller ones. And since "no housing" isn't an option, people will begrudgingly accept housing that is bigger and more expensive than they want, if it's the only realistic option.
My choices aren't constrained by my own greed; they're constrained by that of people with far more capital than me.
The majority of people today don't have 4,000 sq. ft houses, don't buy new cars excessively, or take big vacations. You're describing how a small segment of the upper middle class lives.