Gentrification is a bitch and while I do hate much of what King from Spadina to Bathurst has become, it does cater to a certain audience, and it does it very well. You said it yourself: "they're always packed". That said, that stretch hasn't been the centre of most nightlife fans' scene for 10+ years, at least.
But that's the nature of nightlife - it finds ways to exist. 25 years ago it was Queen Street, 15-20 years ago it was the 'Entertainment District', 10 years ago it was West Queen West (who remembers Bassmentality at 751 or Mansion's parties at 99 Sudbury?!), now it's farther flung areas entirely. Heck, many though that 500 Keele would live for a few years at least...nope. Boy those were some unreal parties though:
Toronto's 500 Keele Warehouse venue has shut its doors. May concerts including Ben UFO and Charlotte de Witte have all been relocated from the Junction warehouse space.
At the end of the day, places change. That sometimes sucks, yes, but to lament that 'it ain't like it used to be' is just hackney'd. If you haven't discovered it yet, Then and Now Toronto compiles an incredible history of just this kind of thing: http://thenandnowtoronto.com/
I'm sure @kotsy
has much to add to this.