More important than the reduction in density (which IMO for the most is not actually particularly bad), is the disruption in the street graph that parking lots represent.
Parking lots are awful places that are psychologically destructive on top of being literally hazardous to pedestrians. A parking lot is a good way to make sure you remove any trace of pedestrian travel in the area, and they represent black holes in the street.
One thing I alluded to in the earlier post is that graph connectivity is tremendously more important than density. If the street graph is disconnected (or just too difficult or hazardous to traverse), people will stop doing so, and there goes your urban life.
Small American towns (that resisted the suburban blight of the 50s) have very low density but manage to be extremely livable and functional by virtue of being well connected. Density is truly a red herring - livable, walkable spaces can be created at most densities short of completely rural.
Some New Urbanist developments have moved towards a model where the buildings directly face the street with parking lot "courtyards" in the middle - this model works. It's still heavily dependent on car culture, which is unfortunate, but is tremendous more functional than the suburban American status quo that is the opposite arrangement, where parking lots face streets and there might as well be a cavernous canyon between the sidewalk and the building (if there even is a sidewalk).