The crazy thing is the current town zoning would not allow for most of the existing small lot residential and all of the downtown commercial properties to be built now due to minimum lot sizes and parking requirements.
We already have a hole in the middle of downtown due to a couple of local part time real estate investors buying the one eyesore and having to tear it down as it was literally falling down and then not being allowed to rebuild on the same footprint because of the need for 1 car parking space per bedroom for their upper floor apartments.
I see the need for some zoning but enacting laws that directly prevent the thing that everyone that lives here loves about the town is crazy.
There is a strong incentive against changing the rules to allow more construction because scarcity increases the value of existing units.
Surely that's not it, because zoning in general and urban planning in particular is what determines walkability, and that is determined by design. Even if you have the most stringent requirements for parking, plans are already produced with that in mind.
Therefore, either a urban area is designed with walkability in mind, or it is not.
When you don't have those requirements, it doesn't even make sense to design around walkability, as nobody would walk to you even if you built a walking path to their doorstep.
There is also some scale issues. A walkable city is great. A walkable neighborhood might not be, not if it is too small and everyone has to drive to work, to the grocer and to the doctor. Public transport makes only sense if it can move enough people. All drivers (so everyone) will be uncomfortable with the walkable, but disconnected small neighborhood.
There has been some rethinking in the last decade or so and cities are trying to become more walkable, more livable and less car focused with increasing frequency.
If a "walkable neighborhood" has none of those things, it's really a neighborhood with sidewalks.
There are doctors, dentists, grocers, a theatre, bars, restaurants, hardware store, ... all within walking distance in my neighborhood. Neighborhoods can be like that.