No it is the old economic theory of utility. What is better, a mansion ins a cess pool, or a mansion surrounded by other mansions? He is saying society at large, is turning into a cesspool.
Wrong. The author stereotypically defines the wealthy. First of all, most of the wealthy live modestly and in normal homes. Second of all, it's their money. None of the author's business what people live in or what they buy.
I'll agree with you on the two-tiered thing -- but note, this has happened before and the system corrected itself.