I think this is more of a city zoning and ordinance issue driven by developer interests. People buy what is provided, and the city government keeps upping the built size. some of this is also driven by building codes, so the cost of building goes up and up by minimum standards that must be met, and as the cost for the minimum standard goes up, people want more size for that cost as a justification. Example, my municipality is phasing in residential sprinklers systems in single family homes, very very expensive to do, so if I'm buying a house that now has this cost added in, that is not a visible, tangible aspect, I'm wanting something else in return...bigger house to show off.

Many people want a variety of housing in a neighbourhood, you will never have duplexes next to 5000 sq.ft homes, they are incompatible from a market perspective, it would solve many housing problems but those buying the big houses don't want to live next to the Duplex, and those living in the duplex don't want (Can’ Afford) the property tax implications of living in a neighbourhood of million dollar homes.