I grew up in a small town of around 1000 people. We had two small grocery stores, a bakery, a butcher and a drug store within our town. Of course everything in walking distance because the town was so small. If you would need anything you could not get in our town, you would go to the next large town (~35k people) by taking the bus (departed every 15min). You of course could also take the car but then you had to park somewhere which is expensive and still walk inside the town.

The argument does not really work. If there would be a rethinking in the people, there would be a demand for mixed use in small towns, which would draw in small shops thus eliminating many unnecessary car trips