Shop house is a flexible creature. It can be a business, but is also easily converted into living quarters, if necessarily, or a parking garage, or whatever you want. It’s just a flexible, convertible space.
I did have one friend that ran a shop and lived above -- it seemed great -- but he owned the building and had done a lot of modernizing of the apartment. It doesn't fit the suburban dream, though. No yard -- the green space for my friend was the county court house square across main street from his shop.
Ottawa, Canada has these too on Bank St. Toronto has many of these streets also, for example Queen West. These are generally the most vibrant neighborhoods.
The solution to having lack of backyard space is to have public parks. Montreal has this more right than any other city I’ve seen.
Of course, from my apartment I hear karaoke late at night, roosters early in the morning, and construction, always construction.
So there are drawbacks. It would be disruptive, especially in suburbia. But I would love some middle ground between crazy Saigon and cultural desert suburban Atlanta.