Do you actually design a city, waterfall style? Wouldn't you just end up with Canberra, the most boring city ever, or Disney World?

Yes, just like with communism, to which I alluded in my comment, with urban design we also have a problem of figuring out what people want, where, and how much of it. The “urban design” people often have the similar mindset to communist planners, who knew better what people should want than the people themselves.