I had a basement in my last home, an 1800sq ft (plus basement, ~1k finished space/rest unfinished) and in my current home I don't really (have an English basement, ~500sq ft, 90% finished + mechanical room, and a crawl space).
Basements are fantastic for storage. Things like seasonal decorations (Christmas tree), off season clothes (bulky sweaters/coats), baby stuff (my kids are 5 years apart in age, I've got bins upon bins of clothes and toys that my youngest will age into over time), outdoor stuff in the off season (bring in the patio furniture so it lasts longer), and bulk purchases (nice to have a place for the Costco sized TP/paper towels/Etc.) as well as a pantry for canned goods, etc. They're also good for giving kids a place to go nuts and not disturb the adults, especially in the winter. Also, in my last house we had our home office in the finished part of the basement, so someone could work (WFH, grad school, pay bills, whatever) and not be disturbed by others in the rest of the house. In my current house, I don't really have a place to work that is separate from the rest of the house, especially when the kids are running around.
I do think there are a couple other things going on with this trend that people might not consider:
-A 4k house in, say, FL, is not that different than a 2k sq ft house with basement in the North. A house on a slab means either inconvenient attic storage (okay for small seldom used stuff, but not really for the big pack of TP or trying to shove the Christmas tree up the ladder) or you stick it somewhere in the main living space (or, I suppose, clutter up your garage and potentially have to park outside).
-features; a small house is probably not going to have a walk in closet, an eat-in kitchen, a separate home office, etc etc etc. I may not want a 3k sq ft house, but I might want those features and if it takes buying a 3k house to get them, fine. Sure, you can probably custom build a small home with premium features, but building your own home is not likely going to be cheaper than buying something existing that's bigger.
-Finally, quality of space. My current house is decent sized (1200 + 500 finished basement) but there are some exceptions. The bathroom is small, so it's a pain to give the kids a bath. The MBR is small, so my wife and I bump into each other when we put laundry away, or get ready in the morning trying to get to closets, dressers, etc. The kitchen is a good size, but there's one awkward spot in front of the fridge meaning if two people need to get stuff from the fridge (cleaning up after dinner, getting the kids breakfast in the AM) it is difficult to move around. None of these are life changing problems, but when we buy our next house, we will seek to remedy them, and it likely means adding square footage. Just because I want an extra 20 sq ft in my bedroom doesn't mean I want 500 more sq ft in my house, but they probably come together, even though I don't need a bigger living room than I have now.