That is a nice street in London. I expect housing prices are high. I also expect housing prices are even higher in areas with narrower streets.
We can talk in the abstract about what people "would prefer", but looking at actual choices is more instructive. Residential privacy is one of those things you can learn to do without. Many people would say that London street has no privacy.
People have different preferences, but I've seen no evidence that people don't like narrow streets, even narrower than the one found in your image.
Those ideas may work well in a mild climate but who wants to trod down a narrow street every day through two feet of snow? Or through downtown Phoenix when its 115 degrees last week?
Here's a very common snow removal vehicle: http://image.dieselpowermag.com/f/tech/11090507+w799+h499+cr... This type of vehicle is used all winter on the narrow paths, sidewalks, and streets at the University of Michigan. Snow levels at U-M are very similar to those in Detroit. I imagine that these vehicles are probably a lot cheaper than the snow plows used for wide streets too.
While googling for that image, I also found this, which I thought was pretty cool: https://www.arcsfoundation.org/minnesota/news/its-time-annua...
You've taken a correlation and assumed causation, without evidence, and ignoring counterexamples.
Huge 2-lane roads with 2 foot of snow on them = no school. Narrow walking streets with 2 foot of snow on them = no problem.
All cities need contrasting spaces. Even the medieval town or city was marked by narrow streets that led to an open piazza or square. The feeling of walking from a confined narrow space into a wide open expanse can give a feeling of exhiliration. It's something architects continue to use today inside buildings. Think of the walk through a corridor into the grounds of a stadium and the excitement it generates. Or the excitement of walking through a corridor in a theatre before you enter the large expanse of the auditorium.
The scale and proportion of buildngs in relation to one another creates a sense of enclosure that can either feel comfortable or uncomfortable. The author calls the extremely narrow streets "intimate" and they are in many cases, but they can also be claustrophobic (especially if you live in them).
For housing, not everyone will want to live in streets as narrow as the pictures in the blog post. Who doesn't prefer long views out of their window? (Preferably of some greenery) That doesn't mean building huge spaces between houses as is often the case in modern car suburbs. But there needs to be enough distance to psychologically feel you have a sense of privacy from your neighbours.
Here is a random Victorian street (in a very expensive part of London) that I think has a good scale. The road is not too wide. Cars are parked on the street rather than in garages. The houses are of fairly high density. This is a better template for housing than modern car susburbs in my view. But it won't be for everyone.
https://www.google.co.uk/maps/@51.556208,-0.165162,3a,75y,36...