You have to remember that you can get breakfast, lunch, and dinner at work at many places, for free....so you need a place to sleep until you can figure out what you want to do. I could live there for a long time and focus on being anyplace but home. If I was in my 20s and just hired by Google, I'd love one of these...spend most of my hours at work or out in the city enjoying my life and just go there to shower, sleep, and maybe hang out in the cocoon and watch movies on play games there. For many, it would beat having roommates or spending so much money on a shitty apt with a shitty landlord and a restrictive lease.
A long time ago, I was living with a girlfriend and things got really bad really fast. She hid a substance abuse issue from me and when she lost her job and fell into a pit of depression, started using...she started getting violet when I'd confront her about it. While I am literally twice her size, I wasn't fearful for my safety, but she took a swing at me while high. She's no fighter and gave lots of warning, so effortlessly stepped back and she fell without me touching her...broke her wrist. I was really she didn't lie to the police because they were questioning if she was a victim of domestic abuse in the ER. I needed to get out. I just moved to that city for her, so all my local friends were coworkers and I didn't want to look unprofessional, so I got a shitty hotel and staying a few nights there cost a lot more than $700.
So yeah, cheap housing is handy: New job, domestic abuse or drama...or for people who are generally nomadic or need short-term housing. In fact, I can imagine a lot of women wanting these because they basically live at their boyfriend's house. Why have a huge place of your own when you can have a small bed to sleep in when the BF is not around? My wife paid rent at an apt she never was at when we were dating.
Now that I am in my 40s?...I wouldn't consider one unless I was going through a divorce and didn't have kids. But when I was younger, I would have loved it.