Because the surrounding infrastructure wasn't made for that density, and it takes way longer to retrofit than it does to throw up density, lowering the quality of life for the existing residents.

Isn't that a chicken and egg problem ?

Perhaps you'd authorize that kind of development under condition of adding sime more infra to support the additional residents, but in itself getting a tower of residents doesn't look like an issue.

You’d have to expand power grid, more water, city employees, build a new school, parking, roads, shopping for the influx of new residents, more police, more fire dept hires.

Further, no one bought and built a 7 bedroom and 9 bath room home on an acre lot to live next to a few hundred people. It’s utterly irrational and illogical.

It completely denies the role of status seeking behaviour in our societies which is a human universal. We need wealthy people enjoying all the trappings of wealth and feel special about their status because it is them who are subsidizing the vast majority of the rest of the population. If you don’t reward the golden goose, no free golden egg. Fight the right battle.

Not sure what you're referring to, but having a 7+ bedroom that sits on multiple lots in a SFH neighborhood is a single of wealth where I'm at. The fact that it sits in a dense community near a city is a bonus.

I've seen some really beautiful homes out in the country as well, but they aren't that practical unless you are retired.