Well, that's how you know you're in Wisconsin rather than Minnesota or Michigan. Look around at the one-stop-light-town intersection. If there are bars on three of the four corners, you're in Wisconsin!
Having lived in southern Indiana I'm surprised by how green it is. Admittedly in Indiana you could buy liquor in drugstores (and I remember seeing a drugstore within a grocery store selling hard stuff) but bars were where people went to drink on Sunday when stores weren't allowed to sell any alcohol at all.
One thing this doesn't do is take into account the size of the bars in question. When I visit Minnesota there are little Mom & Pop bars everywhere (thank you German immigrants) with a dozen seats and maybe a pool table. Meanwhile down here we don't have many bars, but the ones we do have are usually full on enormous nightclubs that hold several hundred people. The only smaller bars around here are the ones in Hotels.
I suspect blue laws could play a big part in this. If you live in a drier area where liquor licenses are expensive, strictly limited, and hard to get, then small Mom & Pop bars don't make much sense. Also, in my state you can't serve alcohol at all unless you also serve food, so technically everything has to be a restaurant, which increases the cost of entry as well. I suspect that graph would look quite different if they included "restaurants that have a bar in them" in the list.
Although it is somewhat dying out (because of other entertainment options such as home theaters, video games, etc.), there is the traditional Wisconsin culture of using bars as social venues where whole families (including young children) show up for an evening to chat and play Euchre -- I remember being about 10 when we visited California for the first time from Wisconsin and my parents were shocked that the bartender angrily yelled "get those kids out of here!" as we walked in.
The crazy patchwork quilt of state liquor laws couldn’t not have a significant effect. But population density/distribution must work into it also: Maybe one mega-mart could serve an entire rural county’s grocery needs, because people are used to driving everywhere so driving 20+ miles once or twice a week to do the shopping isn't a big deal. However, people don’t want to drive that far to go drinking (and neither do we want them to,) so towns that are far too small to support a grocery store will often support two or three bars.
I lived a few years in a town of 400, with seven bars and seven churches. That has to be a record, both ways.
I have to disagree with your reasoning. Eastern massachusetts, home of the blue law, has more bars than supermarkets... and we have a god awful lot of supermarkets.
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