Generally, I like this a lot. The key is that for it to work, you must build taller, but it doesn't have to be all that tall. I've lived in several places that had great walkability, and they all had one thing in common: They were built before the invention of the automobile.

The best for walkability was Berlin, which, in the inner part, is mostly 5-6 story buildings. Within two blocks there were numerous stores and about 8 restaurants and a few bars. I also lived in an older suburb of mostly single family houses, but the lots weren't that big, and every house was two stories.

The key to walkability is that you need density. For a business to get much foot traffic, you need a good population in the walkable catchment area, and for that you need density. To get density, you need to build up. Unfortunately, building up is more expensive. Another thing that's helpful is alleys. If you put the garage behind the house, you don't need as much frontage width for driveways and garage doors.