The US is too lo-density for human driven buses to be better for the environment. AVs will enable a transit fleet of right-sized vehicles that respond to demand and can surge without a big labor force working split shifts.
Even suburbia can be made more walkable.
For example, walking to my local gas station isn't really that practical due to a lack of continuous sidewalks. It isn't that far but the path to the gas station can get pretty muddy at time.
I once tried to get food at a fast food joint by walking, the lack of sidewalks is even more acute. Crossing several lanes of road felt pretty unsafe even when the traffic light is red.
AVs are not currently competing with human drivers in the use-case you say they'd be best at, they're clogging already dense cities with even more cars.
https://www.youtube.com/watch?v=REni8Oi1QJQ
^^ "Not Just Bikes"
While you have a point that "lo-density" is an oversimplification, only New York has the kind of density and frequency of service that make public transit really usable. Boston commuter rail sucks pretty bad, with a too-sparse schedule. BART from SFO to the city is OK but around town there are too few lines and stops. This all could be fixed, but the fact is they suck compared to cities like Amsterdam where cycling has the infrastructure and the critical mass to be safe (unlike London, for example).