I am all about living alone. But, I have spent my fair share of time living with people to save money. At one point, when I was 22 I lived with 4 other people! Gah! The house was never clean, or quiet. But rent was $250, which was nice.
I live alone now, except on every other weekend, when my roommates come to town. It's a perfect living situation. I have the place to myself most of the time, get plenty of down time, and then enjoy hanging with my friends for a few days! Just when I get tired of people being around, they go back to their other home!
I think it's worth a few $100 a month extra to live alone. I rest so much better, and feel like a better human being when I have my own space, and don't have to talk to people when I get home. Saving money is important to me, but not as important as my happiness, or health. I'm a pretty introverted person, and have to socialize a lot for work, so I need that down time at the end of the day.
On your salary (which is about $5k more than what I make) I would totally live alone. I'd be comfortable paying $700-$800. I'd cut back in other areas to make it work. It's worth that much to me.