Tools probably make up an infinitesimally small amount of Walmarts profits
More to the point:
Hand tools were always one of the lower margin items sold in a retail setting.
Traditionally, that's the way the pricing was structured:
Hand tools = you were lucky to clear a 40% net margin
Air freshners, car wax, chrome widgets = 70% - 80%
It's still that way, just not set up the same as far as distribution levels.
Not as much money to be made on tools as on laundry detergent, diapers, and coffee pots.
Retailer will always go where the profit is.
Tools are just a "sideline" thing they offer as a convenience in an attempt to keep all of that customer's purchases "in house".