The speed with which the development occurs is irrelevant. Increased density means that for each given area of land developed will contain less open space. Thereby one trades sprawl for considerably less open areas in the community itself...

Combine that with the increase in pollution concentration that also occurs with greater densities and the environmental benefits you claimed are dubious.

Less dense areas allow other opportunities beyond those mentioned to reduce environmental impacts. For instance, when I lived in Austin, one of my primary food sources during the year was a local, in town, urban farm; http://www.boggycreekfarm.com/