What's wrong with urban planning?

This story from USAtoday.com about a little town where neon signs and fast food are basically unwelcomed in the downtown (more like down-village) core made me think of the city I call my hometown. There was a time when Peterborough, Ontario wouldn't let box stores develop, requiring instead that they fit themselves into existing retail areas. My understanding was that they were allowed to build, they just weren't allowed to go to the outskirts of town, find a big open lot, and set up a new plaza. It made a lot of sense. Walmart was forced to take over a spot in a mall... is that so bad?

Then one day, Futureshop said "We'll bring in jobs and money, but we want the freedom to set up wherever we want." And shockingly, instead of saying "Hey, we've got empty space in this mall downtown that's dying," the city said "Why not? Everyone else is doing it." And all of the sudden, shopping became decentralized, and less pretty, and nonsensical because the city's retail space is haphazard.

Then I moved away. Now I live in Beckley, West Virginia. There are two malls here. One is nearly dead. Seriously. The other is barely hanging on. And all the retail development is taking place in open mini-mall sort of things... why? Because Walmart is there. Seriously, there's more retail life in a one mile radius of walmart (formerly undeveloped space, mind you, because it was kind of the middle of nowhere, and required lots of money to make it flat... this is the mountains, after all) than there is in both malls combined.

So, then I read this little article about a village forcing retailers to fit into their style and space, and I think... why not? Isn't that what planning should be? Making it easier for both retailers (if we all look nice and similar, it makes customers happier, which should result in more sales) and customers (hey, we don't have to drive to the Walmart area, and then 7 miles to the mall to get that item from JC Penney, and then another 7 miles to downtown where we can shop from local vendors) to live?

Naw, lets do what Kingston, Ontario, did... tear down a developed mall so that we can put box stores in its place.