The clubs are ugly (for the most part) are cheaply designed, do little for the community or the economy (there's no spillover (retail in the area is mostly closed, even at 8PM) except maybe the pizza stores at 2AM and the taxi drivers), there's trash everywhere after the bars close, the police prescence is huge on Friday and Saturday night (and cops brought in from divisions across the city). I think people might be against he club district for the wrong reasons, but it really doesn't do much. The north side of Richmond is full of vacant clubs. Many of the club owners are not great businessmen - there's a high turnover in this industry, as installing a bar, hiring some tenders and bouncers, putting in a sound system and turning down the lights to mask the poor design (just have disco bars and some flashing coloured lights), takes little capital.
Actually, I'd have to disagree with a lot of this.
The club crowd does bring a lot of business to the area - a lot of people go for dinner on Queen or in Chinatown, etc. before heading down to a club. After they leave the club, a lot of people head to Chinatown for a bite to eat, where a lot of the owners are smart enough to keep their restaurants open to cater to the large group of people leaving clubs. The crowds who take advantage of these many open restaurants in Chinatown are huge - a number of them are as full as they are during the dinner rush. I've often thought that some other establishments (McDonald's and street vendors aside) would be wise to stay open to cater to the late night crowd, many of whom are looking for a bite.
As for design, it's like any other industry - you'll have some clubs with nice decor, some that are so-so, and some that aren't so great. You'll have some clubs with a strict dress code, others that are more lax, and then some others that will let people wear pretty much anything (the old Limelight, or Slimelight as it was often called, comes to mind).
Turnover? That's the norm in the club industry. You'll have a group of successful long running clubs, others that go through a few iterations before finding a successful formula, and others that change names on a fairly regular basis just to stay fresh. The club industry is extremely competitive and the last thing you want is for you club/brand to become stale. A lot of owners will change their name and look every once in a while just to stay on the radar, keep up with the latest trends, etc. It may seem like the owners aren't very good businessmen, but they're actually very good businessmen (that's not to say there aren't bad ones; like any industry, there are quite a few).
A good example is the aforementioned Limelight (now Afterlife). Before they changed their name/theme/look they really had no standards, which made it popular despite the crappy interior; you didnt' have to worry about a dress code, you could just go in and have a good time. They eventually changed their name to Afterlife, upgraded the interior, etc. and are now more popular than ever.
I would say the club industry and this district are actually quite a boon to the economy - and even more establishments could benefit if they had the foresight to cater to a large group with limited options once the doors close.