I'm moving into a "plex" in a southern city that has become heavily "plexed" over the last 15 years. There are two strategies basically: "plexing" or "tall and skinnying" (the latter is to make very slim houses that have very small easements between them, the advantage of which is that each lot is fully owned by an individual party).
It's got pros and cons. I think the big issue I observe here is that it doesn't help affordability in any noticeable way. Whenever the single family units are destroyed, they are typically the older / lower end variety first, which had previously been attractive as rentals for lower income people but now they have massive value as teardowns so they can be carved up. Those houses get replaced with high end new construction. So this results in increased real estate value and ultimately a concentration of amenities around these areas that are being "plexed." No affordable housing is built (since this is a southern US city, all low income housing is pushed away from the city core to the exurbs, with long car drive commutes).
Another con is that this town does not have public transportation, and their roads are ill suited for 2-3x the old density. This results in the dreaded "stroads" that have numerous stoplights, carry 5-6 lanes of traffic, and are lined by strip malls as the only connectors.
And finally, when a neighborhood gets "plexed," all the existing foliage is destroyed because it is in the way. So the newly plexed zones are barren with only small shrubs and decorative plants, no trees at all.
I think town home style developments make a lot of sense conceptually. They provide easier access than an apartment building and are much cheaper to build. The density improvements are real, although though not as large as an apartment. I just worry that the way it's being done is rather careless and with little thought for the future, at least in the southern US town I am staying in.