I wouldn't support the unraveling of retail in virtually any other situation, but Yonge's character is greatly enhanced through the conjunction of commercial and intellectual space. The stairs will not be "institutional" in the sense of a hospital or court; instead, youth thinking and socializing will mix with shoppers, improving, not detracting from, the dynamic of Yonge.
It will do the same for Ryerson, and by extension Toronto's educational culture. The ancient idea of scholastic separation that dominated early thinking about higher education is now modified for the 21st century: instead of the isolation of campus from city - supposedly giving the learner intellectual distance from (potentially corrupt) society - the educational institution is joined with the city. It is the physical embodiment of Ryerson's goal to connect with the city through its educational offerings.
With campuses like UofT's Mississauga and Scarborogh and York, Toronto needs something to connect the two worlds. UofT downtown sort of does it with College St., but you can see the old idea of separation at work almost everywhere else.