Groups with wildly different incomes all the way from $25k/yr to $80k/yr all spend between 32-37% of their income on housing.

This simply indicates that as people get richer, they demand better housing. I live in Manhattan. I could get the same apartment if I go on to be an associate at a law firm making $165k a year or a public defender making $50k. However, if I'm doing the former, I'm probably going to spring for a nicer apartment. If my primary goal were saving money, as is implied in your job comparison, I could easily live in the PD's apartment on an associate's salary.

The fact that most people who can save big on housing choose not to is not applicable in your hypothetical; to the extent that it is, more expensive housing implies higher quality of life.