Good points guys.
I think that my worry is not that adjacent properties might become more valuable - I think that might be a really good thing to improve the aesthetics and desirability of the street. It would be great if Yonge became more of a lovely destination, instead of such a pinched and run-down corridor.
I worry though, that as available scale and finances conspire, that developers will end up busting entire blocks of low-rise properties at once, drastically altering the character of Yonge Street without necessarily highly improving it.
The issue of architectural quality, as you pointed out, is important. How the buidling meets the street, how well handled it is, the materials used and such. I don't think we want what's happened to upper Bay Street to happen on Yonge though - the problems it has with a sense of sterility, and awkward street life. Standard modern-scale architecture often feels a bit dull. Keeping a lot of Yonge's fine, historic and irregular scale could help prevent that.
But that would require real sensitivity to site, and rare developers who could sustain an almost unprecedented level of civic goodwill over a long period.
As for the height issue, actually, your point is good. If you're up to thirty floors, do twenty more make a difference if it's well handled? I'll have to think about it. Toronto's a city that has very little harmony in its built form, from one block to the next. Maybe it would work better in some places than others.