Really the only reason to use a line spacing of 2 is if you are printing it and then editing the text with a pen. So... maybe in a print stylesheet in a very specific situation? But never on the web, IMHO.

It often can look better to have more whitespace, but it lowers information density. It depends on the situation.

People complain a lot about "wasted screen estate" but the first version that "doesn't waste blank space" is completely unreadable to me on desktop, I want to stop reading after the first line.