My point is that what you described is basically a city with suburbs on a reduced scale. If a town is nice and successful, you're gonna have people that want to move there, so your options are to build outward, upward, or not at all. It sounds like you'd prefer towns build upward rather than outward, which is obviously valid, but it's a matter of preference. People who don't mind living in an apartment will move into the city center, people who value space over commute will move to the suburbs.
Where I think things get turned around (in the states anyway), is the lack of community-run programs and local business owners. Community gardens, neighborhood solar cells, locally owned farms, grocers, and corner stores are all things I'd like to see way more of in suburban areas.