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My oh my - this is the first I heard of this, and my Lady's mom lives at Queen and Bathurst. See what happens when you rely on the internet for news and you spend the day not surfing?
As for what will replace the burned out buildings, so long as it isn't another condo development I am ok with whatever. Yes, older things are often given sentimental value beyond what they are intrinsically worth. But unless the buildings were strongly unique in some architectural or historical way then they were just another row of old burned out buildings that will be replaced with something up to code.
There is a cycle to buildings almost like breathing. We occassionally lose really wonderful old places that are full of magnificent treasures. The worst that happens here is the loss of personal property of the tenants which has value to them and can't be replaced, or the antique shop that was burned out and may have held some old wonders now lost forever.
Gentrification shmentrification. There is also an ebb and flow in where people with more disposable income and social status settle down. If this section of Queen (isn't this the intersection with the highest number of emergency response calls in the city?) gets "revitalized" and has some nice residences with socially responsible people living there and caring about the neighbourhood, or a better layout for shops and such, then there is some real good coming from this event. In another 200 years the rebuild may be considered a treasure to the future Torontonians who live around there. Comes and goes.
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And now to disengage the clutch of the forebrain ... 
I'm going with this - if you like artwork visit http://markfineart.ca
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