We can still distain worsening living conditions. These folks are paying more for less space than a closet. And starting up in an era of more entrenched incumbents with higher interest rates. So looks like worsening odds for more expensive lottery tickets, at least from the outside looking in.
50 years ago, in most places in the US, people shit into pits in the ground covered by a shed with a crescent carved into the door. They had lots of land, and they lived in drafty wooden shacks with, at best, a wood stove to keep them warm. 100 years ago in cities like new York most new immigrants lived in rickety stick buildings and took a shit in shared privies. The fact that it is considered the norm today for every individual to have their own toilet and closet full of clothes is a borderline miracle. A sanitary bed to sleep in, air conditioned, and a living area, that's not good enough for a single person because the bunk isn't queen sized and the living area is shared? I'm not convinced that this is some travesty.
Apples and oranges? Thread is about SF. Having known someone who lived there ~50 years ago, not to mention the parent poster, they described better living conditions for less money.
OK... If this had been an option 50 years ago, and proportionally cheaper, would people have taken this cheaper route? I think probably. It's not any different than a hostel except that it's monthly instead of nightly, and cheaper. The issue here then is the cost of living in SF, not the particulars of this arrangement.
