Sandy: No, Danny!
Danny: Sandy, don't worry about it, nobody's watching.
Sandy: Danny, get off me!
Danny: Come on, Sandy, what's the matter with you? I thought I meant something to you!
Sandy: Meant something to you! You think I'm going to stay here with you in this? this sin wagon? You can take this piece of tin!
Danny: Sandy, you just can't walk out of a drive-in!
Danny: That's cool baby, you know how it is, rockin' and rollin' and what not.
Sandy: Danny?
Danny: That's my name, don't wear it out.
Sandy: What's the matter with you?
Danny: What's the matter with me, baby, what's the matter with you?
Sandy: What happened to the Danny Zuko I met at the beach?
Danny: Well I do not know. Maybe there's two of us. Why don't you take out a missing person's ad? Or try the yellow pages, I don't know.
Sandy: You're a fake and a phony and I wish I never laid eyes on you!
Answer: Well, Danny was out of town, at the beach. It's quite possible that the rest of T-Birds didn't live close enough to each other to see each other during the summer. Also, they may have all had jobs, or been travelling with their families. It's also possible that they DID see each other, although maybe not as "T-Birds". When they saw each other on the first day of school, though, they were Seniors, and they were ready and excited to be T-Bird seniors.
BGraz
Another possible reason is that not all of them were allowed to see friends during the summer. I had a couple of classmates whose parents were strict about them focusing on schoolwork and/or getting a job. No phone calls or visiting friends on the weekends or during summer: "You can see your friends at school."
Do you really think any of the T-Birds had strict parents?
People quite often rebel against strict parents.
When they asked Kenickie where he was, he said "working, which is more than I can say for any of youse kids" suggesting that the 3 stooges (pun intended for their stupid routine that prompts Danny to tell them to "be cool") didn't work all summer. Also, Sonny needed to borrow money in the dinner until he could get his allowance.
In regards to not living close enough to each other, it is worth mentioning that having access to a vehicle was much less common compared to nowadays.
KeyZOid