I do see the potential of the idea. The next obvious step is to bundle it with office space. You could give a discount for every employee you move into the dorm below the office. It's easy to imagine a building with shops on the first floor, dorms in the middle, and offices at the top. You could live on a budget, never have to leave the building for work or food, have 0 commute, and some sense of community.
I think there's going to be a rising demographic of people that don't want to work and are willing to sacrifice having kids for an early retirement. This would be an excellent choice. I could have graduated college, put in a decade in a dorm above a software factory, have minimal expenses, and retire by 30-something.