Interesting. I basically live like this, too. In the UK. But I think most people do to be honest. I think the issue has come with people expecting this NOT to be the norm. Our grandparents' generation would have considered the way we live as perfectly satisfactory.
I do think that social networking, media advertising, and what our culture has developed into has created a lot of people, especially in my generation, to have higher expectations of themselves than what they are finding themselves in now. I have a rather low paying job, I work many hours, and in the comfort of living at home with mom and dad, I was able to build up a large surplus of money to buy a house with. Now I'm living here, with my heat turned very low, using the computer for about an hour a day, taking 10 minute showers, playing severely outdated video games once a week, with no internet, no cable, no telephone, and no trash service, and I'm still finding myself struggling to pay the bills. I'm not in debt, I'm actually pretty far from it. But still, the pretty low standards that I set for myself to live in are still gearing me into decline.
There's no way I could smoke ciggarettes, buy a coffee and a breakfast sandwich every morning, catch a movie, shop for new clothes, grocery shop at stores with all organic food products, go to the gym, eat at a restaurant, and go to the bar for a few drinks like the country expects me to. I just can't afford to live that way.
But in the line of work that I do, I see people living that way all the time. And at least half of them are kidding themselves, with debt up to their eyeballs, and attempting to pay it off with government-funded programs. I sometimes wonder what the repercussions of living in debt are because quite a few people seem to be doing just fine.