There's also an incentive for them to make buildings as large and as expensive as possible as they it affects their income. Certainly I'd argue self interestedly that all living quarters should be as large and extravagant as possible as I'd like to live in a large extravagant place. But, millions (billions?) of people are doing just fine in much smaller places than these self interested architects are suggesting.

That's not really how architecture works. There is a client supplied budget and site that multiple architecture firms submit proposals for. Suggesting a needlessly large and expensive building will do nothing but leave you without any work.