Chickens need to be protected from predators, need to be sheltered from the sun, need to be protected from the cold, need to be fed in a way that minimizes waste, need to be watered in the same way, etc.
Also, don't underestimate the cost of land. Even if it's just $5,000 per acre, if scheme one packs chickens in at factory farming levels, and scheme two packs them in the way I do (remember: 450 times less densely), then we need an additional 449 acres of land.
That's $2,245,000 in land costs.
Plus, how do you distribute food and water over those 450 acres?
Factory farming may be cruel, but it's not dumb. Farmers are smart micro-optimizers.