There are walls, this is an ancient city with walls everywhere.
Have you BEEN to the Vatican? Have you BEEN to Rome? There are line to get in to tours all over the place.
You can post lines to get into the Coliseum, it is very near Vatican City.
However, anyone can enter the country, they simply walk across the street and they are in the City State of the Vatican. No check in gate, no passport required, one just walks in. One can then walk up to the offices and schedule an appointment to meet with State Officials.
There are private homes in the Vatican, as you might put a privacy fence around your home, those exist.
There are priceless works of art and very fragile ancient frescoes, mosaics, etc. Yes, there are limits to the number of people each day who can view these.
The ancient walls were to protect from conquering armies. They are now of historic value, they would not protect from a modern army should it wish to invade.
It is sort of silly to compare the Vatican to any other nation on earth.