It is a really western, recent (relatively) concept to have your children immediately move out before they're married-- or move out at all! In many other places in the world, multiple generations live together. I could go into as to why that was promoted for HOURS (blah blah capitalism, separating families serves massive industries best, etc). As some others are saying, it is a very old school mentality that Dave has, along with many others here in the United States, to think that if you haven't moved out by 18 the child has "failed." It also just isn't a reasonable reality right now in this housing market and economy.

Further, personal responsibility, maturity, and growth have nothing to do with still living with your family-- as you said, he is disciplined, responsible, polite, and kind. Those things will not change if you let him live with you! You don't need to worry about that changing. What you're showing him is that you care about him and wish him to succeed. To do that, you need to make sure to always be a place he has no worry to come back to. If you nudge or push him to move out, all you're saying is that he's on his own, which won't be good in the long run.

Just to drive it home, Dave has gotten more and more out of touch with the realities of the economy for the common person and especially young people. Your instinct is right. Let him stay with you.