That's how a society set up for mostly taxis could be better. But if we get to include the benefits of walkable societies and redoing all existing infrastructure in our arguments, surely going to mass transit is better still? And, unlike repaving all the roads to be narrower, it's something that can be added on top of existing infrastructure.
Yeah, no argument, I'd love more light rail/streetcars. If people are less dependent on personal cars, they'll be more willing to develop toward that pattern with mass transit/small bike/pedestrian roads/etc.