All the man-hours and natural resources spent building all those roads and paying for all that gas to move around on them could have instead gone to expanding production.

For instance, funding new companies, scientific research, and so on.

That is the point of the article.

Of course, the article is fallacious in that expanding production is not inherently better than consumption, so consumption is not necessarily "wasteful."

If people had preferred to live in an apartment and invest their money, they would have. Other things being equal, suburban sprawl reflects peoples' economic preferences. People are willing to pay for all the resources to make suburban sprawl possible.

[1] http://en.wikipedia.org/wiki/Parable_of_the_broken_window

edit: though living in an apartment will be more expensive, so that wasn't a great example.