I think there can be a happy medium where the two can coexist. The law, if ever enacted, needs to include the ability for wine/liquor stores to sell a wider variety of product, e.g. beer, snacks (cheese, crackers, chips, etc.), and extras (glasses, openers, etc.).

low form of Wal-Marting small wine retailers

Could be, but see Silence Isn't Golden's post. Florida, in general, is similar to this example, IMO.

I went to the five grocery stores here in St. Louis I patronize the most, and checked to see if there are any liquor stores in the neighborhoods nearby. Join me on a tour of my adopted city through liquor...
...
The grocery stores sell mass-produced wine and liquors, while the liquor stores carry much larger selections of both, with a much more knowledgeable staff to help you. The liquor stores I've been to (The Wine Merchant and the Wine and Cheese Place), also carry a large selection of mixers, barware, and foods that pair well with wine, such as olives and olive oil, nuts, pasta, and as you can imagine, cheese. Lots and lots of cheese.