At $500-600 per sq ft, I hardly think they will become dorms. Perhaps as a piede tiers for some or furnished suites for business men.
I agree with Pony Boy, for me 778 sq ft for two people is a bit small, although I presently rent a one bedroom 700 sq ft apt I share with a cat and partner and have managed we are moving to a two bedroom 1000 sq ft space in June.
Yes, you can make do with what you have to depending on your finances and what you are used to. Compared to most N. Americans we city dwellers are living in much smaller spaces than our suburban dwellers already.
The square footage in most of these new buildings are a bit extreme for most, unless you are used to living in countries that West End Boy mentions where they are used to living in closets, or in NY where the same apartment will cost you double what it is here.