In many (not all, not most) cases, the builders locate the house in an area completely unsuited for the property. They'll find some low-cost home in an established neighborhood of 30-40 year-old ranch homes (for instance), then tear that house down (or maybe they'll buy two lots next to each other!), then build the monstrosity that towers over everything else in the neighborhood. They'll get variances and whatnot to build nearly up to every property line within fire-codes.

It becomes a nightmare for the rest of the property owners; usually their homes will decrease in value as a result, due to nobody wanting to purchase or live in their home with such a structure nearby. Of course, this may cause them to sell their property at a loss - perhaps to another developer who puts up another such McMansion...

There's such a thing, when you are building in an established neighborhood, to be a good neighbor and build something that fits in (both style and size) with the rest of the homes. Same if you modify the existing home; you don't want to go too crazy with style or structure, because this can devalue properties around you. It all comes down to whether you have any empathy for other people; whether you can place yourself in their shoes and say to yourself "if someone were doing this to a house near me, would it be a problem?"

Unfortunately, too many people that do this don't care, or can't empathise - or if they can, again - they don't care. They just want to build, and flip it for the cash. It's a grab, plain and simple. Rarely do the people who build these live in them, because that would put them at the ire of their (now ticked off) neighbors.