It's an argument about (1) longterm thinking, not the short term thinking that a totally unregulated market leads to, and (2) avoiding hidden subsidies of national chains due to the way we budget for infrastructure (governments subsidize building, but not maintenance).

Because govts subsidize building roads, but not maintaining roads, this gives a big advantage to new malls, which get built more cheaply than they should be. To the disadvantage of existing downtowns, which have high maintenance costs which the government does not subsidize.

So a core of the Strong Towns argument is a real economic argument. It's just a more complex economic argument than merely calling for a totally unregulated market. It's an economic argument that takes into account externalities, distortion through road building policies, and societal-level timescales (3 decades, not 3 years.)