I think I know what the problems are with the wal mart fixies- several in fact, but I don't think you should blame either caliper brakes or the 700 wheels per se.
And my opinions are born from 14 years racing USCF and my own experiences building and riding a couple of motor bikes with 700c wheels.
I've toyed with the idea of building one of those up, by price alone, because it already has the 700 wheels and they are often the cost of this bike or more when you want to find some separately.
I'm not sure if the people here who've built them and crashed have tried to use the fixie gear- A VERY BAD IDEA, and I have to wondrer if anyone is foolish enough.. You HAVE to use a freewheel- in fact I prefer and always use a freewheel and two calipers brakes-
but rule # 1 should be- you MUST use a dual brake handle to control both- it's just to hairy all the time trying to work the clutch and a brake handle there om that side.
Second mistake with this bike and it's diamond frame, and perhaps a lot of mountain bike builds is that 1. The frame is very short, and that makes it very responsive- it veers quickly especially if you haven't done a whoile lot of regular cycling otherwise,
but I think the bigger problem stil then is that the short frame and the straight bars really get a rider too far forward- a sudden stop or braking tends to catapault you forward and you lose even more control as that progresses and go over forward-
I started building one ten speed diamond frame- a schwinn travelller and found that the short top bar put the tank in the way of peddalling- defeating largely my purpose, and instead of staying with the bike which seemed to handling responsive with the motor, I built up a cruiser with light wheels- and now think I have the formula for what I want at least- a bike that rolls and peddles well-
yet I also tend to ride it much like a bicycle and not a motorbicycle- I don't come racing up to intersections or stops and expect to bear down on the brakes and get stopped- I like to roll into it much more- in fact I shut the motor off all the time and coast up to the next stop- it saves a lot of wear on the brake pads-
but the point is it's still really a bicycle and you have to respect the limits- it doesn't make it unsafe necessarily to have caliper brakes and narrow wheels- but you have to respect the limits of it- and it helps to have had a life of cycling experience-
the cruiser frames keep my weight well back unless I want to get forward, and I use BMX bars that allow me to do that, and that are very perpendicular with a good horizontal grip that doesn't lean me forward like this fixie.
and many wil say- wear a helmet- I always use a cycling helmet unless I have a couple of stocking hats on in the cold. I wouldn't be here now if it weren't for a very well-padded Kucharik hairnet back in '78 and an unfortunate head-on with a Chevy Impala at about 55 mph (me, not her) in a race.
I alo like to have a rim with straight sides- not "aero" as many 700's tend to be- because the brake pads dO get a better grip on those then- the rim doesn't angle away from them
and I personally ride tires that are 32 mm wide or about like a 27 x 1 1/4 vintage ten speed bike- although most people with no racing experience might feel more comfortable with tires 38 or wider- I think the Wal mart thrusters are about 38mm--
and at that width you really need a rim that's one inch wide (25mm RIM, not tire) to be able to mount it- so that precludes many road bike rims that measure about 3/4 of an inch wide- I had a 38 wide tire on a narrow rim and it mounted and stayed on, buit I did notice that the tire "swayed" especially in a turn, because the tallness of the profile was too much then for the narrow width- 38 is the normal cut off, and the there's even another cutoff at a wider length I'm not sure where- probably about 48mm or so, you'd have to go even wider than a one inch wide rim, and you find those on some mountain bikes or comfort bikes with 700c wheels.