I suppose micro-apartments were born of necessity, in cramped Tokyo, and other jammed up parts of Japan. 20 years later, American developers and mega-landlords, such as NYU, started to catch on, and build their own micro-apartment towers.
The first ones I noticed were in the 1980's, by LoTek, which upcycled old shipping containers into SROs, engineered by LoTek. It wasn’t long before a cottage industry of micro-living, all the way from tree-houses, to stylish examples you see in Dwell. If this high-living, than why isn’t it catching on with 1%ers?
I wouldn’t advocate living in them simply because it gives developers and landlords props for making a whole lot of something out of nothing. My first exposure to micro-living, was in ‘82: punkers squatting in the old Hamm’s Brewery, San Francisco beer vats. Naturally, the suffered from all of the domestic issues you describe so well, but in those days, these kids didn’t care.