I totally agree with you, Mike, i've had the same experience in another couple AAR: units can see for 1km inside cities and tanks seems to rule urban warfare.
I'm gonna quote myself from another AAR:
ABOUT URBAN COMBAT
Tanks ruled it, and it doesn't feel right. They had a LOS of 1000m albeit with low values, and that means they could engage targets at those distances. Other units could too, but tanks have weapons that can effectively engage and hit hard at those distances, so even with low values, the sheer amount of attacks and their power made them absolutely dominating in the combat inside Hameln.
Tanks (T-80s, Leopard 1s, Leopard 2s) racked up the absolute majority of kills, with almost certain impunity unless the enemy was a tank too. Infantry got wrecked and its impact on the urban battle was almost non-existant unless tanks weren't involved.
The ability to shoot at targets 1000m away in dense urban environement is strange: in a city (at least in Italy, but honestly in most of cities i visited abroad too) it's rare to be able to see something 1km away unless it's down a big boulevard-like road or a very big crossroad/plaza, or from elevated points.
Or maybe this particular battle had something special that influenced the combat. I can't be sure so i'm attaching several save files so if someone wants to re-create the urban combat and verify, he can.