Plenty of people in Japan, Korea, Hong Kong, etc live happy lives in much much smaller living areas. This makes them more affordable. But building codes in many places in the USA disallow making places that small.
Other examples of questionable codes are codes that require parking spaces, codes that require front yards, codes that require backyards, etc....
Parking spaces, front yards, back yards, building heights, building types, density etc are all City Planning functions, and you're right, have little to do with life/safety typically, and in many ways are quite destructive by making walkable livable cities very difficult to do now.
The Building codes, on the other hand, have evolved with each disaster over the last century or two - a building collapsing in an earthquake, people dying in fires, etc. So those have real life/safety protection as a primary directive.
Given how little exercise people get and that we are typically glued to a screen (tv, laptop, or phone) during waking hours, I could see an argument for lowering floor space minimums.
The building codes have evolved over time to protect life/safety of the occupants, so not something you would want to have the City bypass.
[1] https://en.wikipedia.org/wiki/International_Building_Code [2] https://sfdbi.org/codes