We downsized nearly ten years ago. Because we wanted to. Because the rambling, extended house we'd brought the family up in and the rambling, hard to maintain garden had become a pain. A burden. So we moved to a two bedroom and a box room house in a town within walking distance of everything we need. It didn't free up any cash - financially it was a sideways move - but it has given us more time and none of the worry our friends have about heating, gardeners, maintenance etc they have in their big homes.
But, they love their big houses and can afford to keep them (even though moaning all the time) so why should they move? There are though a lot of older people, retired, with less money who can't afford the upkeep and maintenance who might like to move, but don't have the will power/backing/finance to do so. A bit of support for them would be a good idea.
Also councils and housing associations do have a problem. Is it fair that an elderly person should live in a large three or four bedroom house when there's a family of four squashed into a small two bed flat with no garden just down the road?