Redmonki you said "But how many families really want to live together with siblings, in-laws and parents forever? I reckon not many - unless forced to do so."
They key to your question is "forced to do so". When you bring home your baby for the first time from hospital you are forced to get up continuously through the night to ensure the survival of your loved one. We don't like it and if we had a choice we'd find an easier way. The same was encountered by families living within their homes. Daughters in-laws clashing with their mother in-laws - yikes (time to go to the tool shed) and the like. So yes while we have a choice we have decided to discard our parents, and leave them in their pastures dribbling in front of the LCD screen watching Kerri Anne Kennerley while someone's' trying to flog them another vacuum cleaner. These oldies have nothing to live for except the next cup of tea - yes please! The big hi light in their lives is when they see young ones to come in to visit someone in the retirement home. The energy given off from watching these kids smile and laugh is priceless and therapeutic.
So if we didn't have a choice then the all the missing links would fall back into place. A woman may dislike her mother in-law but at the same time she may be fully aware that her presence brings great stability to the family unit.
I'm not saying people should do it now - I'm just pointing out how much things have changed. If we were to go back to having all 3 generations living under the one roof it will then be because we were forced to do so - just as you mentioned
