Yes, that's exactly it!
> or because every individual is getting less and less of an overburdened commons?
No, it's not that at all. Why would common services be overburdened? Everyone still gets their water, sewage, electricity, internet, etc., but it's far cheaper to provide per-person.
And with the density you get to build public transit, so people aren't burdened by having to necessarily own a car.
Water restrictions? Fatbergs? Brownouts? Congestion? Traffic? Breathing room? Not to mention increasing demand on any inelastic local supply will drive up prices. To my initial point, the upscaling of utilities and infrastructure is often magically handwaved alongside the up-zoning demands. There are real negatives to cramming more and more people into one place!
You need to keep less $ invested in infrastructure per person if everyone lives on top of one another in a condo.
If everyone lives in a white picket fence SFH then you have to build miles of extra roads, pipes, cables. Every trip for every bus, truck, and car is a bit further.
There's a lot to be said for both rural and city life but cities can be much cheaper if there's unrestrained development.
If you had to pay the real bill for road maintenance alone suburbs would no longer be viable.
So the suburbs take from the commons and don't give back in your example.
Looking at a random SF suburb, "Pleasanton" [0] - it looks like 72% of their budget is funded through taxes and only ~7% is transfer payments.
[0] https://www.cityofpleasantonca.gov/assets/our-government/fin...
If you build out instead and everyone gets the SFH white-picket-fence life, the escape to nature is suddenly less important. Even if it's more expensive to connect, in the process we develop ample capacity in the commons.
Maybe it's just not possible with so much cost focus and so many competing incentives in the West. And no superseding body who can make it happen like China.
Converting 4-story to 6-story isn't really what I see pitched either, it's generally rezoning SFH/2/4-plex to 6-story+ with subsidies, which is really a huge remaking of neighborhoods.