> how is anybody supposed to meet anyone?
It used to be that you knocked on the door of the residence beside you.
> And now many of them prefer the internet over socializing with people they don't care for that much in person.
This is the crux of it. Your neighbours weren't ever likely to be your soulmate, but that is who was there to befriend, so you did. But now you don't have to. And since they now feel the same way, they aren't putting in the effort either.
There is also the problem of familiarity. It's awkward.
Traditionally you'd live around the same people your whole life. Invariably they'd feel like family and it wouldn't feel awkward to get together. But that's not how modernity works. People move to different communities all the time, so it becomes difficult to build familial friendships with others.
That's the essential problem. The internet allows us to stay in touch with people who feel like family. That's what we want to do psychologically. If all those people were in the same city there'd be a lot more socializing.