Desirable for some. You make it sound like everyone wants it which I dont believe to be the case.
Making assumptions not based on data can lead you to the wrong conclusions, like the conclusion you are making here.And if you think a village house in the new territories offers the same thing, than you either haven't been to the US ...or you've never lived in a village house.
You're going off into tangents...I'd suggest stop talking about your ideal place, comparing things that are so vastly different but instead answer the OPs question : Is HK undesirable for kids?While a village house gets you a bit more space, they rarely have large tracts of land with them, they offer little privacy, can be extremely noisy...
I'm not saying that suburban living is everyone's cup of tea or is better...you and others might prefer living in a high rise or high density living and that's fine. To each their own..this is all very subjective.