I don't think it's an excuse... if you're still living with your parents, it's harder to date, it's harder to maintain relationships and its unlikely that the family home will have space for the parents, kids and then potential grandkids too. Not impossible of course, but it's what people aim for. The square footage isn't the issue, it's the physical separation from other people (ie, a crying baby waking up parents and grandparents every night instead of just parents).
The lean towards massive McMansions is more of a economic issue than a consumer preference. Builders made more profit on that type of housing so that's what was built. New houses generally don't have a lot of backyard space, because again, it was more profitable. If apartments were more profitable we'd have so many of them I'm sure.
From what I understand is the reason housing companies are collapsing is because the last couple of Liberal Federal governments decimated the trade school education route and so now Australia doesn't have enough qualified tradies to build all the housing it needs.