Why an urban UGB?
Simple: the federally subsidized suburbanization institutions created in 1932 made a consumption based model of building that assumes a limitless supply of land. We do not have a limitless supply of land. The feds continue to offset reality by subsidizing track homes built not by the end user, and artificially deflating the value of farm, forest and natural lands. The biggest lobbyist in DC is the Home Builders Association.
"Lifestyle Centers" are not the answer they are just another auto-oriented, federally subsidized mall that will be half empty and obsolete in 20 years time.
If you think otherwise visit a place without metro-wide planning like the famous shrinking cities of Detroit or Cleveland, check out central Kansas City (especially the very unused and tax break ridden Jumptown developer's Power & Lights District which is seen by locals as a folly, local business killer, and a raping of taxes), check out Atlanta!
However, our UGB is not perfect. Ours does expand when it shouldn't and we see federally subsidized auto-only suburbanization, inequity and elitism within it (for examples the differences between "BeaverTron" and "Lake No-Negro"). Keep in mind it is experimental. Also keep in mind "Vantucky" (local name, not my own) should be in the UGB but is not so it throws the concept slightly out of balance (in my opinion this is a good thing for variety in urban design).
I find it a tragedy that the older cities "have to" hand out tax subsidies to developers to offset the Federal subsidies given to greenfields. Worst of all, no one knows suburbs are very heavily subsidized in the first place.
The world's most "livable" cities are ones that have very strict land-use laws and publicly crafted (planned) new development that supports/ coexists with older development.
the effect of the UGB on people living in close-in neighborhoods is very indirect at best.
Go travel and see the rest of the country if you don't believe it effects things like preservation and reinvestment in the inner city.