Each kid gets their own bedroom. A home office. Maybe a movie room.
Compare that to the 1950s boomer house, that has 2 kids in 1 bedroom, and no "extra" rooms.
Perhaps you have them all.
Everywhere else, buyers can only buy what exists. Affordable home buyers buy nothing because there is nothing within reach.
The notion that people would choose detrimental living because they couldn't get a house that was 3x their need seems absurd.
The more likely cause is the reality that new houses cost more than double what they were in the 1980s - adjusting for inflation and comparing for size, amenities and market.
With dropping fertility rates I'm sure there are plenty of people with 1 or even no kids that don't need those rooms. Home office will be entirely domain dependent (I don't see e.g. a couple of dentists needing or wanting a home office).
So the fact that the default house is pretty massive means that all sorts of people are priced out entirely.
Is it that buyers are wanting more house or that builders make more profit selling more house due to red tape and zoning?