It's just not Generation Y, it's everyone who has the freedom of not being invested.
Place Shakers has a nice post on why Generation Y is not buying into the automotive lifestyle. It's not just Gen Y, it's anyone who is overburdened with their time. Also, it's anyone who is living in a reasonable metropolitan area that can support mass transit. If you go to New York City, it's not just Gen Yers who are riding the subways, go to any major city and it's the same.
What Gen Y and more recently generations is a case of the Emperor's new clothes, given fresh eyes they are seeing what is, as opposed to what use to be. (Yes, I know the analogy is approximate). The post really asks, are the assumptions of the past about transportation still valid. And increasingly the answer is no. Previous generations are invested not only in automobiles, but housing with a mortgage that is underwater. Gen Y does what it does, because it can.
The question now is if you were to build a transportation system today, based on the constraints and starting conditions defined today. What would you do? And how do we get there, short of a clean slate we need to find leverage points which enable us to transition to better environments. Right now, even if we knew what to do, we can't. The reason, zoning.
Towns that can rework their zoning laws will become more attractive and foster interesting growth, if you can't do it for everyone, choose the places that have. And yes, this can be the suburbs. Look at how Canberra is organized. Not perfect, but energetic nonetheless.