The apartments contain a chapel, an office for the pope and a separate office for his secretaries, the pope's bedroom, a dining room, kitchen and rooms for two secretaries and for the household staff.
Considering the position he holds, I actually don't consider this amount of staff or living space to be overdone. Work needs to be done, where are the staff supposed to do that work?
He’s still going to work at the Vatican and is also gong to receive official visitors and do the usual papal things there. These places are very close to each other, and all he has to do is take a few minutes walk to his offices.
I seriously think this was suggested by BXVI. I think that Francis was probably going to go back to living at St John Lateran, as Bishop of Rome, and probably BXVI persuaded him to live a little closer...but still at a safe distance.