The more junk the higher the probabilities of an accident. It doesn't have to reach two digits probability for it to start to be a problem. Densely populated areas + high likelihood of space debris could lead to unacceptable risks. Although I agree the actual danger is in the orbits and with deployed satellites.
Densely populated areas probably reduce the risk for objects this size, as skyscrapers and subways are harder to go through vertically (when starting from space) than bungalows and cars.
Most junk burns up in the atmosphere and so is harmless. Large or dense things are a big problem though. Satellites need to be designed with respect to how they break up on reentry.
