Most of the time when they're shown off, they're sitting isolated on some huge lot somewhere in the woods, so housing density isn't it. I mean, clearly, just look at how they're positioned on the market -- 9/10 are in the woods or next to a lake or some such. A housing situation that's less sustainable than suburbs.
If I look for ones that are actually for sale, they just seem to be rebranded college apartments or RVs - except now the sellers are charging twice as much because they attached a solar shower to the back or something.
They often come with advice for how to get them into RV parks or mobile home parks, but those can be very expensive to dock a house in and can sometimes come with uncomfortable and very real externalities as you intersect with the transient and the poor (plus, if you're going to live in a mobile home park, you may as well just buy a used mobile home, they're much more comfortable to live in).
Just like RVs and mobile homes, most of the shed-like tiny houses are terrible housing investments because the market views them as what they are, RVs and sheds, and depreciates them over time on average, while actual real estate tends to appreciate over time.
And for the non-RV tiny houses, they don't solve the mobility question. They're just about as fixed as a normal home structure.
And notions about living less materially seem okay, but there are many long-term stories of tiny home dwellers who run away screaming because of how cramped their living conditions are, and all the unexpected external costs (like self storage for their actual stuff) that never seems to get into tiny house movement propaganda.
I feel like what they're actually trying to solve is the desire of apartment dwellers to "own" a home without having to go through the normal home ownership system, which they've been conditioned to view as a trap of some sort for reasons, and "hack" that system by coming at it from some non-traditional angle.
It's also interesting how pretty much all of the professionally designed and purpose built tiny homes seem to lead their sales pitch with all the tiny house movement awards they've won and really not much about the structure or the maintenance of the 20 acres the tiny house sits on.