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I don't know where you live but in every city in the US I had been there are minimum lot sizes and setbacks to prevent fires and flooding and those leave plenty of room for parking so I don't see how walking could change that (it's not like fire propagation and water absorption cares about your mode of transportation).

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You are describing the problem. Minimum lot sizes is a problem caused by over reliance on cars.

Not really, they existed before cars. As I said they are dictated by the fire safety, flooding danger and nuisance concerns. All the stuff you read on Reddit ("people want to live in tiny apartments but those are illegal to build", "it's illegal to have mixed commercial and residential use", "lot sizes are blown up by parking requirements") could be proven to be completely insane with few minutes of research.

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