Current laws about minimum sizes (WRT size alone) already sufficiently allow small sizes (as far as interior size of the unit is concerned).
Commonly it is __other_laws__ such as access to two fire escapes which cause larger sizes than some might desire. An example addressed in my reply's following lines 'Fireproof Buildings' which some localities allow to relax such rules.
But your argument sure sounds like we shouldn’t allow the permitting of SROs or boarding houses anymore, which is what parent is arguing for.
Forcing everyone to have a kitchenette and their own bathroom sounds like the sort of thing we want to “preserve everyone’s dignity”, but mostly it forces people on the edge out of housing altogether.
So I probably disagree with you that your current zoning is small enough.
If I understand correctly now, your argument is that minimum size laws are not currently a bottleneck for building denser apartments? If so that’s a valid point wrt what changes should be prioritized, but I think it’s fine to point out that minimum sizes also need to go.
As a counter example, hotel rooms are usually required to have a restroom but not a kitchen area. Yet they're often even larger than studio apartments. This is because the other safety, engineering, and other-units factors enforce requirements that make smaller units pointless. They might even create security management issues in the common space between units.
If what you're really seeking is cheaper ways of housing more people, then generalizing the question and changing the variables being optimized (other than size, which most places, particularly in other countries, already do great jobs on).
Offhand, the 'wave a magic wand and fix the rules' solution just limited to this problem space might include something similar to. Fireproof (no flammable materials in the building construction, build in furnishings etc) buildings only require 1 fire-shelter level egress path. 'better' elevators (less shafts / density; might go to a Wanka-vator / turbolift like loop system). Eliminate window requirements in favor of two independent paths to sources of fresh air / shelter in place points.
With the above, the sort of smaller unit hacks that others (but not I) desire might include commons facilities for coffin-hotel things like a gym/pool lockerroom and shower, a common kitchen, etc. However my experience with shared amenities (E.G. rooftop BBQ grills) is that they suffer the Tragedy of the Commons. There's always going to be at least one person in a group that uses things improperly, or leaves cleanup to others, etc. In the case of shared lockerrooms that aren't rigorously cleaned this will also lead to communicable disease transmission.