The argument in favour of density is that if you increase density, then you also decrease the average distance that people have to travel until they get somewhere interesting, like a job or a shop.
Vehicle-delivered utilities like garbage collection, package deliveries, and mass transit get more efficient, and the same goes for tunnel-delivered utilities like fiber internet and water.
San Francisco is economically one of the world's most impactful cities; it'd be good for all of us if there was more of it. You get all sorts of interesting multiplier effects when you put lots of a certain kind of person in one place.
- all the theater kids in one town: LA
- all the bankers: NYC, London
- all the computer people: SF