I have no specific experience with Waterloo, but sometimes towers follow a Corbusian ideal of a tower surrounded by nothing; or worse, a tower surrounded by high-speed roads/highway — essentially a stacked bedroom community with no walkable amenities.
FWIW, I live in the region and disagree with OP's characterization of "serious decline" and "most people have left".
I went to school here from 2003-2008, moved away and moved back in 2011.
The area's population has increased by ~20% since 2012 (~the death of RIM, according to its stock price). In 2011, it got regional train service to Toronto. In 2019, it got a local light rail train.
The university area that the OP seems to be referring to is, IMO, more walkable and bikeable now than before. Some of the towers are mixed use, with ground floor retail.
The city is definitely quite different from the early 2000s, though.
A dense housing boom could hurt walkability if it replaced mixed low density retail and housing and if there was no compensating retail boom near housing.
First floor mixed use retail can address this, but sometimes those spots sit vacant because of cost or other issues with rhe space.
I guess my definition of walk ability includes seeing interesting things and being able to walk towards them. The condo towers block the sun and you can’t see beyond them walking down the road.
My post was a bit too negative I suppose, some people probably like the tall buildings surrounding you when you’re walking, I mean it works for New York City right.