I don't buy it.One way to explain Queen East's relative stagnation compared to western areas may be the lack of any agglomeration benefits from the areas around it.
Put another way, the western parts of downtown have benefited from being close to other desirable neighbourhoods. Ossington for isntance clearly benefited from being close to Queen West but substantially cheaper. Likewise, I suspect Dundas West is now benefitting from being close to Ossington.
There are nice areas around Queen East, but they don't really offer the same agglomeration benefits. King East is populated mostly by furniture shops. That's great an all but I don't understand why someone would want to live near a chair shop. The Church-Wellesley area's appeal is maybe more targeted than, say, Little Italy.
So, the best way to develop Queen East may be to encourage more nightlife and entertainment along areas like King East.
If Ossington benefited from being close to Queen W, why Queen/Jarvis doesn't benefit from being less than 10 minutes away from Eaton Centre? If all the hustle-bustle at Yonge/Dundas is not enough to change Dundas/Sherbourne, why do you think what happens at Broadview, across the valley, will have any impact on it?