In Silicon Valley, you are probably saving an extra $12k a year by going Studio vs 1BR. Even with a modest 5% yield, adjusted for inflation (say 2.5%), that is $34k by the time you retire. That is your retirement car. Make it 7% and it becomes $64k... save man, save.
Guess it depends on the person, but my building the difference is about $1-1.2k between studio and 1br. Unless you have alot of stuff, studio is plenty, otherwise you're just gonna fill it with crap you probably dont need as well.
The bigger the better. In Bay Area you get all the money back when you sell the house - because of appreciation - so you might as well live comfortably. I have never heard anyone selling the house for a lower price than they bought it for in Bay Area.
There is plenty of land available; its use is just restricted by zoning laws. If the laws change in the next 30 years and they start building high density housing, prices will crash. There's also the chance of a dotcom crash, or of remote work becoming more prevalent, or a big earthquake destroying a bunch of housing which gets rebuilt at a higher density, or any number of other things that could negatively affect prices