I might go so far as to suggest that we were a better country back when this was the norm.
My wife and I are on the brink of buying a big ol’ house that might have been built (in 1908) with this sort of arrangement in mind.
I agree that anyone who can afford to move out on their own should have the right to do so. After all, that's what I did, nor did I move into my in-laws’ when I married. Both my parents, on the other hand, grew up in multigenerational households before heading out on their own, and benefited from the mutual support found therein.
Brings to mind a poignant conversation I overheard between an American and a gentleman from India who was working in the nursing home business.
The American guy asked him what nursing homes were like in India. After a long pause, he kind of rolled his eyes and said “We don’t have any. You must understand, in our culture there is a very strong obligation to take care of your parents, so you would never, ever see an Indian send them into a nursing home”.
The American gent was a bit taken aback by that answer, I could tell.
I think people would buy big homes hoping to have big families, and sometimes they did and sometimes they didn’t, but either way, once the kids left the nest, or if there was a loss of the breadwinner, you could set up shop as a boarding house. So it was kind of like insurance, in a way.