The parent is right. Shanty towns are the extreme low-regulation end of housing and they're also extremely cheap. It's a matter of how bad we want to allow people to treat themselves and our standards for safety and comfort keep going up so cost does too.
The $500 cost of a shower unit and toilet isn't what makes housing unavailable to the poor. Housing standards are a good thing as accommodation quality regresses to the minimum allowed by law.
The cost issue is less from the inventory and more from the space. Even just 2qm (quite small bathroom) more per unit adds up to a lot quickly.
Personally, I hate to share a bathroom with neighbors. But when I could not avoid it for a while when I was younger, it could still manage. I'm sure others in less fortunate positions could, too, considering the other, more impactful crap they have to deal with.
A 2 square metre bathroom is too luxurious for you? How small a room are you suggesting should be provided to each individual in your view?
I, and I think you and the grandparent comment, too, agree that there is a tradeoff to be made.
I probably should have said 4qm, which I believe is more commonly used. In that case, merging let's say 4 of them into one shared room yields 12qm of space. That's enough for an apartment!