But isn't this supply meeting demand? If there were too many taxis, wouldn't the supply eventually cull itself when nobody can make enough money?
That results in an increased cost of policing the area (since all drinking and clubbing establishments are forced together), the increased cost of cleaning (everything from garbage and smashed bottles to a surprising amount of vomit), increased regulation, transportation congestion, medical care, etc.
It also results in a neighbourhood which goes from a mostly pedestrian mall-esque area full of shops and boutiques to a shitshow where you might get punched for no reason (as happened to a friend's boyfriend as they were walking home from the movie theatre; shattered his jaw, which had to be wired shut).
The problem isn't necessarily 'outsiders are bad', but rather that these people come downtown, drink, have a good time (or a bad time), but feel no responsibility for the area. They don't have to walk through it after a bad night to get to work and see the catastrophe they caused, so they may never realize the social and economic impact of bad behaviour. If it were their mailbox kicked open or their doorstep puked on or their neighbour hospitalized, it might encourage more restraint, or at least more consideration, but unfortunately that's not usually the case.
I think that's generally the problem with the 'drinking district' in a lot of cities; people from everywhere but there go there to party and have fun, and if they don't, they cause problems and then head on home, lost in the crowd, and probably don't even remember it the next day.
1) Nightlife and fun weren't utterly concentrated into single small districts, forcing people to commute to go out for an evening.
2) Cities and towns dealt civilly with college students instead of treating them as pinatas.
In neither the Vancouver example nor the Wrigleyville example is the problem "college students".
Sure, maybe you could push it out of one neighborhood and into another, and the residents of Wrigleyville might be all for that, but is that actually much of a net gain for society in general?
I'd rather have drunks clogging sidewalks and taxis clogging roads, than drunks clogging roads.
Calibrating those thresholds to not generate more traffic (as people barhop with cabs instead of walking between bars) and to not kill the nightlife completely would probably proof challenging though.
There are completely similar places were ("drunk bar clientele from outside the area makes it difficult to live in") without any taxis (e.g in Amsterdam or Barcelona). Or places where the drunks prefer to drive (don't ask). In a dense city people can just walk there from a different area, or use the metro.