>Well even in Japan it's all urban sprawl. Tokyo is the largest metropolis in the world
This isn't true (the urban sprawl part): while Tokyo is the largest metro area and does have a lot of sprawl, it's also continuously growing upwards, and not that much outwards because there really isn't much room left on the periphery (ocean and mountains are hard limits). Older, smaller buildings are regularly being knocked down and replaced by new, taller buildings.
I don't think so at all. Growing outwards only works if you have an instantaneously fast transit system. There's a reason the real estate in central Tokyo is some of the most valuable in the world: because it's close to everything. The farther out you go, the less valuable land is, because it takes time to get to the center (or anywhere else).
This is of course true in American cities too, but zoning laws largely prevent new (and taller) housing construction close to the center, so they have no choice but to build outwards. In Japan, building upwards is much more feasible, only requiring that you acquire some desirable existing property first. (Of course, there are some limits to what you can build on it, but it's nothing like in the US so it's much easier to get approval to build some nicer and/or bigger/taller.)
I live in a depopulating regional capital city of Japan, and we're still building upwards. In the past 4 years or so, I can count at least 7 large (12+ story, 150+ unit) condo buildings that have gone up. People want access to entertainment and short commutes to their jobs.
This isn't true (the urban sprawl part): while Tokyo is the largest metro area and does have a lot of sprawl, it's also continuously growing upwards, and not that much outwards because there really isn't much room left on the periphery (ocean and mountains are hard limits). Older, smaller buildings are regularly being knocked down and replaced by new, taller buildings.