There is a cap, but the question is whether that cap is high enough to meet demand. If demand stays the same, and you increase the number of cars that can fit o

There is a cap, but the question is whether that cap is high enough to meet demand. If demand stays the same, and you increase the number of cars that can fit on a given road at once by decreasing the space between them, you've potentially reduced congestion. Walkers, cyclists, and public transits also take up space, and there is a theoretical cap to how many a city can support. It's just that the cap is well above any reasonable expectation of demand, because those are all very efficient in terms of space. So, it's not really a difference in class, just a difference in degree. Cars don't necessarily have to be as space efficient as walking, just space efficient enough.