Unlike Queen West, which started revitalization at Queen and marched south to Wellington, the east side is doing the opposite -- starting with Esplanade/St. Lawrence/Distillery/WDL and marching north through King. Think of Sherbourne: St. Lawrence, then the King east condos, then Richmond, now the Modern. Queen east at Sherbourne is where this stops due to AoD's list (tough to revitalize that corner with the shelter there, and through Dundas to Gerrard it's a mess.)
This is exactly how I feel. The creeping improvements (or gentrifications, depending on your view) are happening, and while it might not be obvious day-to-day they are actually happening quite quickly. When I was at Ryerson in the mid-nineties, I remember that anywhere southeast was a no-go. I remember walking south on Jarvis to see concerts at the Warehouse and being quite nervous. Now these same areas are my regular haunts.
The southern edge of the downtown east, The Esplanade, is now bookended by upscale development on either end (Distillery District and the London/L-Tower cluster). The SLM neighbourhood is vibrant. The King East shopping strip is now very upscale and is quickly extending all the way to Parliament with the East Lofts, the King East condos, Toronto Sun building redevelopment, etc. all happening in just the past 2 or 3 years.
And, slowly but surely, this progress is now creeping to the north.
Sherbourne is a perfect example: with the Modern condo soon to be completed, more businesses like the Bisogno cafe north of King, Fusaro's at Richmond are going to follow. Even a few years ago I rarely went north of Adelaide, but now Sherbourne feels clean and safe all the way to Queen, and even there it's not as bad as it used to be.
Just west of there, Rezen condos have been complete for a while (though sadly unable to find retail tenants yet). George Brown has invested in an amazing new cooking school building at Frederick and Adelaide. The Vu condo has transformed the entire area over to to Jarvis and Richmond. Vu is not a total success architecturally, but if you compare it to the former Goodwill building and surrounding neighbours, the sketchiness quotient is drastically reduced. The Post House condos will be under construction soon.
There was a bit of a lag, but the retail strip north of St. James park is rejuvenating now, and a new Gelato cafe is opening soon at Adelaide and Jarvis, none of which would have been supportable without the condo redevelopments to bring people in to the area. Similarly, Church St. in the area is also changing, with the Spire condo quickly followed by a Starbucks and Harlem Restaurant. St. James Cathredal is also finishing up an ambitious architectural restoration of their Diocese building fronting Adelaide. I think B Espresso and the George restaurant are the first brave upscale establishments on Queen East itself, and they both seem to be doing very well.
Basically, if you were to map the downtown east transformation on a slow-motion timeline, I think it would look like a hurricane's tidal surge creeping in from the south, spilling up the north/south streets and filling in each block as it goes. It's just now lapping at Queen St East, but it will only be a matter of time: a few more years, maybe, but it's going to happen.