Increased supply is increased supply, and what are desirable and undesirable neighborhoods change. If property owners feel their investment is threatened by increased supply, they aren't going to be mollified just because the new supply is a couple of miles down the road rather than a couple of blocks.
I don't think that's the issue -- it's just people specifically not wanting those types of developments to "ruin their neighborhood". I bet if you asked them, they would say "Oh, yeah, those new towers are great for the city! But I don't want them here because this is a quiet, walkable area and I don't want that to change." Problem is, each area says that, so it's hard to find areas where the homeowners actually want this kind of development. Developments end up in commercial areas, but you can only convert so many commercial areas to residential and still have room for you economy to grow.
