I saw the link to www.windandrain.com in the latest Alum Mag. So I took a look. Very nice. I live in a World War I variant of your idea, a California Bungalow (2 BR, 1 bath, but separated dining room (with an arch rather than a door from the living room) and a separate kitchen, all in 1000 sq.ft. There are literally thousands of such bungalows in Oakland and elsewhere in California, so to some extent (as I think you would likely agree) your ideas are rediscoveries of old practices.
I am also not quite so down on apartments in general as you are, though about public housing apartments, no criticism is strong enough. (A friend of mine went to an exhibit in Glasgow some years ago about public housing, showing different designs from different periods of the 20th century. The beginning and end were the same: single family row houses. Apartments occupied the unfortunate middle.)
But the reason I am not down on apartments in general is that they do work in many places. Most European cities (other than London) are all apartments, and my friends in Paris, say, are quite happy. New York too is mostly apartments which work. San Francisco has a housing type with row houses with two or three floors, each a flat with 5-7 rooms, which works wonderfully well. When I look for the difference between apartments that work and public housing that doesn't, I note that the ones that work are integrated with businesses (shops on the ground floor, which are really convenient), good maintenance, and (often) restricted number of people using public spaces (meaning responsibility for bad behavior can usually be correctly assigned).
That said, America is clearly more house than apartment oriented, and I am certainly pleased to have a house. It was very good to see good design applied to affordable housing.David Margolies (St. Andrew's, '66)