walnut isn't a wood. It's a nut. At least in the sense that that's what this substrate is made out of (crushed English walnut shells to be precise). And two, with any reptile substrate it can work great under certain circumstances, you just have to know when to use it. Loco, you seem to have waged war against every substrate for reptiles that there is, not to mention the entire pet industry. I'm curious as to what exactly they did to you? I'm an LFS employee, have been for 6 or so years, and while I realize that many (most?) stores' employees aren't qualified enough to hold, let alone sell, a reptile, there are plenty of places that make an honest attempt to inform the customer as much as they can, inasmuch as the customer is willing to be educated.
And I've rarely been to pet stores where your money is the only consideration in making a sale. They may spread ignorance, they may tell you everything wrong, but unfortunately this is more often due to employee carelessness and improper training than some nationwide pet store conspiracy to take your money. That said, pet stores have far more to gain from an educated customer with happy healthy reptiles than they do from someone who buys a herp totally unprepared and has it die in the next six months, because they usually do not return to the hobby. Your 'model' of pet stores only ends up in closed businesses, I've seen it year after year. So maybe before you attack the entire industry at any opportunity based on whatever questionable experiences you've had at your local petco, you could reword your statements so they are not generalized, inaccurate attacks.
Anywho, as for walnut bedding I will say I have used it at work off and on with 6" and up beardies for several years with no problems (no 'rubbing raw' of the feet noticed). I used the fine stuff (esu, now rzilla, makes it) and I never (talking in years here) had impaction issues. I also used it since about 1999 with my own fat albino leopard gecko, again not a single problem noticed other than it smells badly if you don't change it for more than 3 weeks or so (even with thorough spot cleaning). So I don't believe it's as horrible as some would say, but I will say it is extremely limited in application. The only upside is its relatively cheap and easy to clean and replace, and it clumps like cat litter. Wow, this is getting long, but in summary I will say while I don't particularly care for this stuff as a substrate I also hate to see people blame it and all kinds of other substrates (rather, perhaps, than careless husbandry) for all of their reptile's health problems. I'd like to see veterinary diagnoses supporting that and until that happens I remain skeptical.