Perhaps the difference is that today's outskirts are impractically far away. 2 hours commute per day? That's more than 10% of my awake time. i.e. Fuck that.

There are two ways a commute of 2 hours a day of commuting can work out. One, if you can actually get work done while commuting. (That has a couple implications -- usually it means a train, not a subway, so you can get a little Internet, and there's a minimum commute length before you can actually get productive.)

Two, if a substantial portion of that commute doubles as your daily exercise, and you can enjoy it and improve your health. (Usually this means a bicycle, which brings along certain weather-related implications to its practicality. Think it works better in Silicon Valley with its mild mild climate and utterly predictable rain.)

The problem with this in London (my city), at least, is that transportation (commute) costs[1] go up fast as you move further away, assuming workplace is not something you can easily change. This means costs don't go down as fast as you might expect, after the initial sharp drop.

[1]: and this is completely forgetting the time involved.

Right. There is virtually no difference here.

I can get a 1BR flat around the corner for 15K GBP or a 1BR flat 1.5 hours away via metro for 10K GBP + 3K GBP travel costs.

3 hours commuting daily for 2K GBP saved? Not even minimum wage.

(Driving is impossible, by the way. Parking costs would be 20GBP a day or more. A motorcycle could possibly work.)

I actually think that commuting is broken as a concept, at least considering cost savings. It's likely easier for me to find a way to stuff in an extra hour of work, freelance or whatever, and do that instead of commuting.