Two new apartment buildings recently went up where I live. Both have roughly the same number of units inside, and the units are of similar size. One is ugly, and the other blends nicely into the neighborhood, even incorporating some green space and planted trees. There's no reason why the ugly one couldn't have been nicer looking, other than that the developers didn't bother to make the place look more like the surrounding buildings, and nobody required them to do otherwise, even though it would have been a trivial extra cost.
Dogwhistle for NIMBYs though it may be, something akin to "neighborhood character" is a legitimate thing that residents benefit from (including and perhaps especially lower-income residents who would otherwise be priced out), and its loss is absolutely an externalized cost in terms of qualify of day-to-day life. Green spaces, shade trees, etc. are nontrivial in their importance to residents, and the importance of deliberately preserving or expanding those features actually increases as density increases, because otherwise they will be lost and possibly gone forever.
So I don't think it makes sense to be an absolutist about design review. But there do need to be some checks in place to prevent abuse by incumbent property owners. I don't know what those would look like, but I also know that a treeless street walled in with apartment buildings and no local shops or other amenities makes for a sad shitty neighborhood. Housing equity needs to be about the complete lifestyle, not just about making more physical square feet that humans can theoretically inhabit. Otherwise we're just repeating a denser version of the same development mistakes that gave us stroads and suburban sprawl.
Of course, "existing condo sues other condos" isn't quite the same thing. The loss of the view is legitimately an externality, but here I think it comes down to a question of whether the current owners are entitled to their view, or if it was always a temporary benefit that would exist only until other condos were built.