Waterfall can work, and in all the businesses that build physical hardware it's kind of unavoidable. I've been a cog in a giant IC project and seen how it works there: architecture diagram at the top, broken into functional blocks, each individual contributor is handed a tight spec for what to produce with defined inputs and outputs.

But there are four big constraints on waterfall:

- it takes considerably longer

- it produces no visible results until right at the end

- all but the smallest changes require restarting the clock and budget

- it requires a small team at the start and a big one at the end (an observation dating back to Brooks)