The undifferentiated gridiron layout for “additions” to cities was criticized in the early 20th century as insensitive to topography, wasteful, and ill-suited for growing auto traffic. When the Federal Housing Administration was established in 1934 to guarantee mortgages, homebuilders saw it as devoted to ensuring the success of their projects rather than as governmental interference, so were much more receptive to FHA’s underwriting criteria than to local subdivision regulations with similar aims. FHA’s 1935 technical standards suggested that streets should fit the local topography and have widths suited to their requirements (not overbuilt on the assumption that every lot might someday contain a factory or apartment house). FHA standards also promoted the “functional classification” familiar to us (arterials, collectors, local streets) that had been made necessary by the growth of auto traffic. “Best principles” publicized by homebuilder organizations Urban Land Institute and National Association of Home Builders and by planning officials of American Society of Planning Officials and the American Institute of Planners during the 1940s followed similar concepts, recommending loop and cul-de-sac layouts that followed local topography and efficiently subdivided often-irregular parcels. Cul-de-sacs branching off collector streets were promoted as the most attractive layout for single-family dwellings.

Postwar homebuilders initially turned to modified grids to relieve the “monotony” of long, straight local streets, but research in the 1950s by traffic engineers seemed to show dramatically lower accident rates for T intersections and bending streets. By the 1970s, homebuilders increasingly favored cul-de-sacs even in places where the terrain was completely flat.

From the late 1980s, planners began to note the drawbacks for pedestrians and cyclists of cul-de-sacs and the functional classification system. The movement initially known as neotraditional development (later the New Urbanism) promoted permeable networks that didn’t push all traffic onto collectors and arterials, and that allowed pedestrians and cyclists to take reasonably direct paths through neighborhoods.

Probably the best source on this subject is Michael Southworth and Eran Ben-Joseph, Streets and the Shaping of Towns and Cities, though it can be instructive to look at ASPO/AIP/APA publications for city planners, and at the ULI Community Builder’s Handbook and Residential Streets.

I recommend you x-post this to /r/urbanplanning if you don't get any good answers here.

Clarence Perry and Clarence Stein, the urban planners, were (to my knowledge) very influential in the creation of the modern American suburb - arterial roads surrounding residential blocks that are typified by meandering roads, where the only non-residential development are community buildings like schools.

Take a look at "The Neighborhood Unit" by Perry (1929) here. For Stein, take a look at Radburn, Fair Lawn, NJ (1929) and contrast that with Sunnyvale Gardens (1924) which was, as you said, a square block development. You can see both of them on Google Maps. Stein's philosophy can be seen in his publication "Toward New Towns for America" (1951).

As a less-historical aide, this form of town planning, though meant to slow down cars and be safer, actually isn't. You can check that out here: http://www.wseas.us/e-library/conferences/2010/Harvard/CEA/CEA-33.pdf