I think this area of Liberty Village in its current form is pretty bad and does the historic architecture a disservice. However, I don't think we need to make this a hyper-dense community.
The model for urban development here should be more Vieux-Port and less Garrison Point.
This would also be a great area to build out the city's nightlife and cultural scene and for that reason should stay primarily as employment lands. Noise complaints kill culture and Toronto is running out of space for people to be loud and have fun.