If each floor has 20 units and there's 10 people per unit, that's 200 people on one floor -- that's a lot of wait time for the elevator (which was sized for typical occupancy, not 5 people per bedroom), extra foot traffic, overflowing trash cans, parking/traffic issues, running out of hot water (if it's shared), overuse of shared/common areas, much higher resident turnover, etc.

Though in this case, the company isn't cramming people in that tightly, so it's not an issue.