OK, now extend that line of thought just a little bit further.

Why will the developer make more money if it's in an already developed area?

Because that area has better access to shops, schools, and workplaces.

Sure, you could build a giant apartment building out on the edge of town—the land would certainly be cheaper!

But, given how things are today, it's unlikely you'd ever fill it in a way that would recoup your investment. In order to make something like that work, what we'd really need is proper public transport that reliably stopped at (or near) such a development, with well-sited stops in town in order to allow residents to do all the things they need to do. To reach the things that are in the town.