A proposal to shut Market Street to cars is re-emerging, according to this from SFGate: Fight brews over plan to shut Market Street
The evidence on pedestrian and transit malls is not uniform, but it is important to distinguish causation and correlation. Which pedestrian malls failed because of lack of cars, and which malls were pedestrianized because there was already a decline underway this technique was hoping, but failed, to correct.

In Planning for Place and Plexus we discuss the issue in Chapter 11, it begins:

Fresno, California is the 37th largest city in the United States at the turn of the century, and is one of the fastest growing. With over 482,000 people as of the 2000 Census, it anticipates 790,000 by 2025. With that size comes the problems that face many U.S. cities: what to do with downtown, how to bring people downtown who don’t work there, how to keep jobs downtown, and so on. Fresno has an advantage that most of its suburban development has been within its rapidly growing city limits, allowing the city to capture a substantial proportion of that tax base. Historically, growth in Fresno has made a steady march to the north of downtown, leaving downtown near the southern edge of the city. While the city hopes to annex land, and direct growth to the southeast, recentering around its historic downtown, that area is not what the city government or many residents hope it to be, and it hasn’t been what they want for nearly four decades.
Urban planner Victor Gruen designed Southdale in the Minneapolis suburb of Edina, often credited as the first fully enclosed climate-controlled shopping mall. Gruen turned his attention from creating new pedestrian realms to reconfiguring old ones, and was a major proponent of auto-free streets and districts. One place Gruen was able to at least partially implement his ideas was the heart of Fresno, where following his 1958 plan, six blocks of Fulton Street the main street through downtown, was converted in 1964 to Fulton Mall, a pedestrian mall with no motor vehicle traffic. Cars were diverted to parking garages one block above or below the street, and the cross-streets remained with pedestrian signals along the mall.
The mall, as a signal of government interest and investment in the area, was initially successful in attracting some private development. But the macro trend of suburbanization toward the north overcame the micro-investment downtown, and soon the mall resumed its existing course of decline. In part, this was driven by department stores and other stores closing, saving their investments for greener (financially at least) pastures to the suburban areas of north Fresno. Office buildings too went unoccupied. While never completely abandoned, downtown was not operating at full capacity either. Efforts to attract residents to the downtown include a minor league baseball stadium for the Fresno Grizzlies, the AAA baseball team affiliated with the San Francisco Giants, and several small museums. The Fulton Mall has a number of businesses serving the Hispanic community, but not all storefronts are full, and are certainly not getting the rents that owners would like to see.
Solutions proposed have included opening up the mall to vehicle traffic. A study from Eugene, Oregon is cited by advocates of demalling, including the City of Fresno government. In 1989, the City of Eugene, Oregon, Planning and Development Department surveyed cities that had built pedestrian malls; 18 had already been removed. Fresno’s mall was described at that time as “doing poorly,� with “downgraded retail.� These conditions remained largely unchanged throughout the 1990s.
There are opponents to re-opening Fulton Mall to motor vehicles, including the Fresno arts community, which on February 28, 2006 staged a “March on the Mallâ€? to attract media attention to the possibilities of improving the mall as a pedestrian space. Ideas included free wireless Internet access to attract lunch-goers to dine outside, additional housing, and improved public transit. Posters displayed as part of the March (which was really more of an assembly, or even Theatre of the Absurd) advocated “Fresno, Clean Air Leader” and “Fresno, an Entrepreneurial Giant.” Fresno, due to its automobile orientation, centrality in an agricultural region that is irrigated desert, and its location in a basin (the Central Valley), has some of the worst air quality in the United States, including the third highest mortality rate from asthma, and in 2001 beat Los Angeles in terms of days in violation of the EPA ozone standard.
Clearly, a great deal of effort has been put into making Fulton Mall work. The site has benches, shaded areas (important in the summer sun), play areas for children, aesthetically pleasing (and working) water features, clear signage, ample parking, a brand-new stadium, and farmers markets, and the elements illustrate the evolution of urban design ideas from the 1960s to the present. One certainly feels safe walking there in daylight hours. The government has tried to assist by occupying a number of buildings that had been vacated by the private sector.
What places are appropriate to be exclusively auto; what places to be exclusively pedestrian; and where might they co-exist peacefully? In the corner of auto-exclusivity we have freeways, in the corner of pedestrian-exclusivity, we have skyway networks, underground cities, shopping malls, airports, houses, and office buildings. Are there streets where cars do not belong? This is a question of design, and for public streets, these are squarely in the purview of public policy.