I think I agree with you on a fundamental level, but there must be solutions to this problem where the answer is "everyone should live in a city" (or a relatively urban environment) I would go to any lengths not to live in a city again.
I don't think everyone should live in a city. I HATE cities with an absolute passion. But it would be nice to have more local, self-reliant solutions in smaller towns and rural areas that require less driving, too. I'm thinking more along the lines of small, local economies rather than packing everyone in a city.
I have the impression that too many people think about actual examples (like: I hate New York - or insert your hated city name here) rather than the idea of a city.
I have lived in a couple of large European cities and each was very different from each other, so I can't draw a "generic conclusion".
Cities can become what people imagine they would like - which sometimes is wrong/sometimes is right (in the sense: sometimes they imagine they would like X but when they have it they are more unhappy, other times they are more happy). But we should talk more about what we like and wish rather than where we want to be or not (city/country-side).