It's convenient for my cousins.
They love to play mahjong together. This way, even a typhoon shuts down the city won't stop them getting together. Their children will also live near by so very handy babysitters with grandparents
Even these days, most hire domestic maids to look after the kids, it's nice to have the grandparents around to keep an eye on everything.
I remember when my mother sold our last house. The buyers were related to the next door neighbours.
As much as I love my brother, I couldn't imagine living with my family in a house next door to his.
Different cultures, different ways of living. It's cool to have a network of people (family) who will do favours for free, instead of having to hire people to babysit.