Obviously they do it to maximize density. I agree with your dream home. Unfortunately, we only bought a 1/2 acre but we are still far away from our neighbors and I've never ever seen a house that looks like the one I live in.
Actually, my dreams are relatively modest, or at least would have been 15 years ago and 1000 miles from here. The last home I shared with my parents was a real beauty. Probably "only" a little over 2000 sq ft, exterior was all brick and cedar siding, on .9 acres of wooded property on an island (connected by a causeway) with 150 ft of water frontage. For the first 6 years we lived there the lot next door was empty - the people who bought it cleared far too many of the trees (or rather the people they hired to do the work did - they weren't pleased) too close to the property line. Next big wind storm we had a 14" diameter 60' tall fir tree laying across our driveway when we came home. Every house on that island was custom built, and there was a real variety. Classic places like ours. Big ranch-style places. Even a geodesic dome. My parents sold that place for CDN$170,000 in '94. Where I live now I couldn't buy a comparable piece of land for less than $500,000, probably more. Without a house.