A reminder for this discussion, the ultimate goal of the hospitality rooms is to raise money for the program, indirectly.
I am guessing it doesn't currently run much of a "profit", if it does at all. So, adding more expense to it doesn't seem to be a tenable solution to me, let alone the cost of building some permanent home for it that isn't "cheaply thrown together". I also doubt there are that many fans that aren't already in it that would be induced by it being a little more spacious. Even if there are some fans that fit that, how much room is there to increase donations to the club that aren't going to gold room already? Presumably they aren't interested in donating much more to go to the green room, so the "market" for increased fundraising with the gold room would seem small to me.
Your first reaction to the idea of a price increase was to be pissed off. So, they are kind of trapped at this point. It is expensive to operate and the fans want more for less. But, in my mind, a price increase is what is needed to solve the problems people are expressing. When demand outpaces supply (and you can't easily increase supply), you increase prices to balance the market. Doing so would reduce the overcrowding, require less food for those people, generate more money per donor, thus more "profit" that goes back to making the program.