"... why doesn't Walther just scale up the ppk..."
Actually, they did. The first Walther Militär Pistol (MP) was a scaled up PP, straight blowback. But it was almost as big (8" long) and heavy (33 oz) as a 1911. The German army tested them, apparently with less than satisfactory results, and very few were made. According to several sources, the blowback action, though favored by Fritz Walther, just was not up to handling the 9mm Parabellum round. I have not seen any actual test results, though it is known that the German WaffenAmt did not like blowbacks in 9mm. (Walther later used the "MP" designation for other, locked breech, pistols, leading up to the P.38.)
Jim