While that's definitely largely true, there are a LOT of students in Waterloo who almost never take transit. I have a friend who recently attended the University of Waterloo, lived on residence his first year and in a University Ave apartment just a couple of minutes' walk away after that--I visited him a few times a year, and he always expressed thorough unfamiliarity with the transit system. I asked him about it and he said he very rarely took it, maybe a couple of times a year. He was within walking distance to the university, most of his friends lived similarly nearby, there was a small grocery store across the street, so I guess he just didn't want to leave the area ever. It's an odd thing for a university student in a city to do, but it's not uncommon--many of his friends and classmates did the same thing.
In fact, when I drove over to visit him, we would regularly go to a restaurant that's easily accessible by bus from his place but an easier drive on account of the bus not being tremendously frequent--it's his favourite restaurant, and the bus ride was only about 15-20 minutes with little walking and a $0 fare for him, and yet he only went when someone could drive him. That, of course, seems utterly insane to me in Toronto. I guess some people just have that mindset.
When I asked him if he was excited about the LRT, he said "the what?" even though there were to be two stops about a 5-minute walk from his place (and one by the restaurant he likes) for the same $0 fare. Boggles the mind.