Correction- You THINK that most people on the Ecclesall area want a house. I think (and obviously these developers do too) that the demographic of people in that area on eccy road are young, sociable people who would like to rent for a few years with their mates/partner, be close to town where they can work, go out and party before settling down in a few years further out of town in the aforementioned 'nice houses' you so desperately want on that site.
Definitely the correct decision to build flats on a empty site in a prime position in a very busy area. Good luck to them.