I think for much of the time, we choose where we live like we choose our cars, totally inappropriately:).
Perhaps if money were not an object we would choose better, but probably not. Most of us are forced to live according to our budget. For good reason inner city areas are beyond the budget of most people. There is really no option, in the larger cities, but to commute.
I work directly with four colleagues. I live the closest to work which is about 15km (it takes me 15mins to get to work) two others are 55km away, the third is 65km away and the last one 85km. These other four live on the same route so they share the driving. It is their choice to live further afield. Even the one that lives 85km away is home in just over an hour after he leaves work.
When I last lived in a major city I was able to walk to work quicker than I could drive (and, no, that is not a reflection on my driving ability). The one way road systems were such that I had to drive in the opposite direction first to get to work.
I don't think we should be too critical of where anybody lives in relation to their work, but governments need to recognise that once they place financial impositions on travelling they are under an obligation to provide viable alternative travel. In Oz they have not really done this, as Damian has pointed out primarily because of the distances involved and, relatively speaking, the low population.
Regards
Paul