The Venn diagram of "people that want traditional small town life" and "people that currently live in a small town" has a smaller overlap than you'd think.

The small towns in my area are desirable not just because they're small, but because they're small and have the same amenities as a bigger town. These towns are also increasingly relying on debt to fund decades of deferred maintenance just to keep the amenities they already have alive.

This would become dire if (for example) property values fell, as residential real estate taxes make up the majority of tax revenue. This might happen if demand for the town fell (perhaps due to fewer people), which would quickly become a catastrophic cycle (revenues fall, roads and schools deteriorate, which makes the town less desirable, repeat ad infinitum).