This is, broadly, the point I was getting at—you need the "other stuff" for all those bike lanes and sidewalks to be worthwhile. There is a tendency among proponents of walkable cities to downplay the comprehensiveness of the changes needed, and how firm the government's hand needs to be to get to the desired result. Your last point especially as "pricing in external costs" is a polite way of justifying a sin tax on behavior you don't want to see. It's necessary to tip the market forces in your favor and start the 'flywheel' so to speak but you can see how this might rub people the wrong way, making their current way of living more expensive to nudge them into a lifestyle they don't necessarily want. Nobody likes being told to eat their vegetables but especially no one likes being told to eat their vegetables by someone they see as a condescending adversary who presumes to know what's best for them.

All this is to say that I believe the discussion of this initiative is complicated by the framing that the current way is a problem and this is The Way to fix it.