Yes I suspect they are. Rents are incredibly high in major cities. Having seen the size (&cost) of the rooms available for rent in london these containers look quite reasonable.
In the west we don't have favelas so while I think it would be a down-point, I don't think there would be such a strong negative connotation.
> Are people really so desperate to live in an expensive city that they'd be willing to live in a box?
Certainly, but the thing with expensive cities is that the hard part of that is finding the space and meeting the legal requirements, not getting the box.
That's also the problem in suburbs (though the space problem might be a little easier, legal requirements are at least as much of an issue.)
Also, how do you plan to get away from the image of metal box houses being tied to shanty-towns and favelas?