Wouldn't want to live there myself, but I find it very interesting how they are functioning, and thinking of ways they could improve their space.
I feel sorry for their 2 cats. 175 square feet doesn't seem like enough space for them to get exercise, which is one reason I could put a loft in there. They'd be able to do some climbing.
Here's a full size loft bed that utilized drawers as stairs to get in and out. Plenty of room underneath for tiny desk, and/or 2 comfy chairs. Underneath the beds could be a cozy library. This model looks kinda cheapy, but I'm sure they could make or get something really nice. The bottomost drawer could be really deeper, all the way back to the wall, the next one a little less deep, etc. Or, they could use it as a crawlspace for storage.
If they never have anything in the refridgerator, I'd get rid of it and use it for more storage space. In fact, I'd get rid of that entire kitchenette, and expand the bathroom out. They could then get one of those tiny washer/dryer units, to at lease wash their jogging clothes, underwear, t-shirts, jeans, etc. The cat's litter box could also go in their.
Then, along that entire wall in the living area could be all sorts of shelves, a small coffee making area...even a tiny tiny fridge for drinks or snacks.
This one's basically 20"x20"x20"
None of this would mean making more space for junk, but would help them make their lives a bit easier.
Eating out doesn't have to mean unhealthy fast food. These 2 people seem very sensible, and there's lots of inexpensive, but healthy things they could pick up on the way home, or have delivered.
Anyone else remember a thread from a while back about people living in a small space? It was in China I think.
Here's a blog about small living spaces.