I mean low earth orbit is at least as much space as we have on the surface, which is already pretty damn big.
Yeah, speeds and orbits and stuff change the game a bit, but i can't imagine even a few thousands of satellites cramping a space that large.
When a satellite nears the end of its life expectancy, US law requires that the remainder of the propellant be used to decelerate it so it disintegrates in the atmosphere over the ocean. Presumably European and Asian space agencies have similar rules. These rules didn't used to exist, and there's stuff that's been up for decades.
Yes, these objects are very far apart, but they are moving very fast, and there are surprisingly many of them. Operational satellites are extremely valuable, and if we anticipate anywhere close to a 1 in 1000 chance that one of these objects will collide with one of our satellites, we will burn some of the irreplaceable propellant to avoid it.
Which is when relative motion becomes a problem. The Empire State Building and the Trump Building are at approximately the same altitude (i.e. sea level) but you don't have to worry about them crashing into each other because their relative position doesn't change. In space everything is in relative motion which effectively costs you another dimension.
Then you no longer have "space" you just have "a line" and if two things are at the same point on the line, they eventually crash into each other.
But anyway space is very big and the probability of collisions is still low. Two geostationary satellites out of control would probably not collide, they will pass a few hundred of meters away in any direction. The big distance between them is mostly to avoid interference between the radio signals.
Tell me why you might think thats a bad idea?
https://en.wikipedia.org/wiki/Space_debris#Growth_mitigation
It's not an infinite amount of space, so without taking some precautions it would fill up over time, and it's undoubtedly easier and cheaper to avoid the problem altogether than it is to fix it once it becomes a problem.
"________ is huge, we don't have to worry about it!" is how we ended up with so much pollution on earth, so why make the same mistake in space?