Density is a side effect, it's not desirable in itself.
But because it is "required" for all these things they want (or think they want, or say they want) they decide it is worth it in itself.
A simple thought exercise shows it's not density you want, it's the things that are enabled by density indirectly. Even at the tourist level, imagine visiting Paris - all the stores, cafes, art museums, tourist traps, everything you visit is there, along with the streets and supporting infrastructure - but all residential housing, hotels, etc are gone except for the small bungalow you're staying in. It wouldn't matter! As long as everything you interact with is functional you don't actually care about the density - it's just that arguably you need that density.
DisneyLand is fun even though it has extremely low residential land and everyone commutes. Hell, Manhattan quadruples in size during the day - without the commuters the place is a fucking ghosttown even with the population.
And larger houses and land is desirable in itself, too - this again can be shown with a simple thought exercise. Everything else being equal would you rather live in a 1500 sq ft apartment or a 1500 sq foot house on the same lot? Most people would take the house, though arguably a nice penthouse apartment might have a view worth looking at.