Earlier quoted context omitted.
That concept has already been implemented. Urban planners who practice it call it "new urbanism". It has been a mixed bag, but is better than the "malls-connected-by-highways" approach of many suburban development s.
Too much density decreases the quality of life. Overcrowdedness, very long waiting times at every establishment or government office, increased ease of pickpockets etc. to "disappear into the crowd", higher prices. You already see all this in many existing cities; you want that, but worse? I'll take malls connected by highways over that any day. Malls are nice and cars are a better experience than transit/walking in…
This isn't even remotely true. You are forgetting the time spent finding a parking spot, the opportunity cost of having a parking lot instead of more housing or commercial space, transit/walking also provides exercise, which matters in an epidemically obese society. This doesn't even get into the pollution aspect of driving or the costs of car ownership/maintenance. Cars become a depreciating asset as soon as you buy them, should we be encouraging that type of investment?