Not sure it is in the middle of nowhere. Last time I checked the Sydney basin isn't that large and is geologically bounded as a "smog basin". Its only about 7 miles/10km to all the suburbia around it by map - in all directions but the south which ironically recent flight paths were not marked in that one direction. Given due to mountains and airspace restrictions around that area flights are going to go over existing housing present quite some time back (30 years +). Its also oddly an airport not near sea for noise abatement in what is mostly a coastal bound city.
Knowing Australian real estate I'm pretty sure land around there was already marked for development before the airport was proposed as well (Oran Park, Twin Creeks) with many established suburbs in the flight path vicinity as evidenced by all the local news reports (Penrith was mentioned a lot just doing a google search now).
This was more of a case where the NIMBY's lost out for once I think. But generally NIMBYs in lower social economic areas generally do lose out which is what Western Sydney is. Its only the wealthier suburbs who successfully lobby against development in general. This is common worldwide; and an effective strategy to build more airports - place them in areas where its much harder for the community to build resistance (time poor, not as well connected to powerful interests, less wealthy, etc).
The sad part about this, as the article alludes to, is that the benefits are diffuse and are often enjoyed by people in areas not in the vicinity of the airport. The costs (noise, air pollution, etc) are borne by the locals.