You're right that this is a generational thing, but the expectation for your kids to move out like this is also relatively recent: historically it was a lot more common for your children to continue to live with you, or if not, to live very nearby. Arguably one of the biggest reasons for the modern birthrate dropping is that lack of local family ties to help with childcare.

(And yeah, for college this just isn't practical: college accommodation is temporary, tiny, and students have practically no money. Taking all your stuff with you to college is a lot of effort for very little gain).