This is going to be controversial but here is my 2 cents:
I don't know about controversial; but I would certainly differ in my take, as I did above, in saying that I think your take is just a bit extreme.
Yonge's soul has been eviscerated. That sleazy seedy feel was the soul of Yonge. It's a feeling that gives the closest feel to a rowdy seedy New York/San Francisco/Chicago/LA feel.
You might be talking about Hell's Kitchen in New York City which was once a den of open drug dealing, porn cinemas, peep shows and all sorts of other similar stuff..........
Last I checked, you can now find a Disney store.
Welcome to Hell's Kitchen:
Talking to friends who hail from London and other parts of Europe, Toronto is just very uptight and prude.
In some respects this is true, but much less so than it once was.........
Remember that in the time being lamented here, Sunday shopping was illegal; so was pot, so was gay marriage, and a whole host of other things.
Toronto was one of the first major cities in the world to have legal gay marriage and the same can be said for legal access to pot.
Video arcades everywhere have fallen by the wayside with online gaming; strip clubs and porn shops have largely been replaced by internet porn, but also by sexting, by a more permissive culture around sex, by a legal nude beach and women being able to be topless in public in Toronto as well.
That said, there are still 2 strip clubs on Yonge downtown if that's your thing...........
I don't think 'prudish' is the really the right word for Toronto anymore, which is in fact a social leader in liberalization in many respects; I think it might be fair to say Toronto tends to favour 'order' and has a bit more of a reserved sensibility than some places. Though that's all relative.
The second problem is cost of living is so expensive that it's eating up majority of income. People are not going to go out to bars, restaurants or spend if they can barely pay their rent and other cost of living. This stretch of Yonge St. also is home to a high percentage of students who are most likely living on very low income, spending majority of the time studying and quite possibly decamping from the city once they attain their education.
That is certainly true in some measure. No question the real estate market is pinching on some people's entertainment budgets.
A final thought though..............
Go have a look at the Yonge of the 1940s in old photos.............It looks nothing like the Yonge of the 1970s/80s.
There were more cinemas, it was generally more upmarket (not necessarily fancy, but not sleazy), when College Park was still Eaton's, and there was a second Eaton's on Queen (pre-Eaton Centre) it was a very different place.
Many surely would have lamented the loss of Yonge's soul when the Eaton Centre arrived and Eaton's College closed and porn cinemas and video arcades suddenly flourished.
Just a reminder, all areas evolve over time.
Yorkville was hippy central before it was the Mink Mile.