I can't say I'm fully convinced by this explanation but at least it is an explanation and it refers back to early medieval times:
The other important feature of the Great Mosque was that, as a space, it was closed off to the outside. Roman cities were structured by wide streets leading to central forum areas, to which processions led and where public participation could be considerable, as continued to be the case in Constantinople for centuries. Amphitheatres (in the West), theatres and racetracks were other major venues for public activity, and the Hippodrome of Constantinople carried on this tradition for a long time. In the Islamic world, the mosque courtyard took over from all of these; major political events, like collective oaths of loyalty, took place there, not in any secular location. And the Arab states did not use processions as a major part of their political legitimization; the assembly in the mosque courtyard was sufficient for that. The need for wide boulevards ended; pre-Islamic Syrian and Palestinian colonnades were quite quickly filled in with shops in the eighth century, some of them commissioned as public amenities by caliphs. The narrow streets of Islamic cities resulted directly from this, for there was no public interest involved in keeping them clear from obstructions like vendors' stalls, beyond a certain minimum (enough for two loaded pack animals to pass each other, later jurists said). Public display came to be focused on the mosque, and secondarily, rulers' palaces and city gates, rather on the cityscape as a whole…The caliph and his advisers were nonetheless making a set of conscious symbolic and political points by organizing the Great Mosque as they did; and the way the public space in Islamic cities change, to focus so exclusively on mosques…would have seemed to them auspicious and fitting.
That's from Chris Wickham's The Inheritance of Rome: A History of Europe from 400 to 1000. If you're wondering why I'm skeptical I suppose the key question is how much weight to place on the mere fact that Wickham a) seems to be certain, and b) in general knows what he is talking about. What would count as a test? Is a systematic comparison possible with Christian or otherwise non-Islamic cities in the Middle East from the same period?
Here is a related post on donkeys.