Have you lived the alternative? It's obvious people are raised to want large houses and large yards, its cultural, but given we'd know the true experience of both would we still feel that way?
I've lived the big city, high density European lifestyle, I lived it in America too, and in Canada, and I've lived the American and Canadian small town life.
They're both nice. The small town life is great if the community is healthy, and there is a town core that is dense of businesses and shops which you can go to and walk around. It gives you access to nature and land in an unprecedented way. And the small population means you get a feel of community and know others, and events can be hosted on peoples properties.
If the town is struggling, its not that great, and can start to feel depressing and isolated.
The european city style is also great, it feels like a buzzing small town, minus the access to land and nature. The sense of community, knowing your neighbors, being proud and invested in your neighborhood. Being physically active. These are all there. Similar to how you can find that in prosperous small towns too.
In the end, I feel the choice between small town and European style cities is personal. If you prefer nature, enjoy quiet downtime, and peace, small town wins. If you prefer urban landscapes, a buzzing vibrant environment, and constant flux of activities and creativity, European cities would win.
That said, I'd be surprised if anyone prefers the American style cities and suburbs. Its like the worst of both worlds. You get a medium sized house, big enough that maintenance is a chore, yet too small to have the space for serious house endeavors. A yard, but too small to have it be a place to enjoy nature. Its not quiet, yet also not buzzing. It lacks creativity and the feeling of community, and everywhere is hard to get too, too far to walk, too crouded to drive.
That's what I think people complain about. I personally hate them with a passion.