While not common, kinetic weapons do still exist, and are widely used by outlaws and pirates because of how cheap and easy they are to keep running.

Since I'd wager most of what the empire does by 5BBY is clearing outlaw gathering places, putting down civilian riots, and not fighting against fully equipped rebels (at least not on a scale large enough to matter in terms of designing entirely new units) they would come up against kinetics fairly often. Often enough that they would either need a separate vehicle for patrolling such areas, or the general purpose unit needs more structural integrity.

The empire does like making "good enough" units that can be deployed everywhere, so they really should make the ATST stronger.

They constantly underestimate their opponents, though.