"Enough is enough," said one Edinburgh resident, about the scene of desolation in Princes Street Gardens. Following this year's bigger-than-ever Christmas Market and Hogmanay celebrations, the mudbath left after the festive village was dismantled is disgraceful. I'm tempted to say it looks as if a herd of belted galloways has run amok, but that would be unfair. Cattle don't make half as much midden as the city's annual cash-cow.

Reassurances by Edinburgh City Council that this part of the gardens will be restored to its "annual summer glory" within 14 weeks are crass. To turn the area over to commercial activities from November, with an unsightly and unpassable clear-up lasting from January to May, is to commandeer the place for more than half the year. Eight weeks would be acceptable; 28 is not.

Naturally, this eyesore won't be published on any VisitScotland website. Most sightseers won't ever catch a glimpse of this inglorious aftermath. Meanwhile, between now and the middle of May, those who live and work in Edinburgh must pass by and avert their gaze, wondering how their city became a mere pawn of the entertainment industry and not an illustrious capital of which they could once be proud. As one of many disgruntled locals tweeted, this is ruination "in the name of greed".

I cannot think of a city of comparable elegance, venerability and wealth – a Unesco World Heritage Centre to boot – where the first thing you see as you emerge from the train station, or arrive from the airport is a wasteland. Welcome to Scotland! Here we don't roll out the red carpet, but – after an agonisingly long delay – we do renew the turf.

There's a palpable feeling at the moment that Edinburgh is undergoing seismic change, under our noses but without public consent. News last week that planning regulations could be relaxed to allow restaurants, cafes, and a host of other non-retail outfits to move into Princes Street is a fresh cause for concern. If approved, this new dispensation could mean that one of Europe's most beguiling boulevards – the street that sells Scotland – could become home to a casino, cinema, or even a sports facility.

Why should this concern us? Given the tawdry quality of some of the shops currently trading, wouldn't bright cafes or restaurants be a welcome improvement? After all, the array of tartan tat, cheap-as-chips fashion and even an emporium dedicated to sugary sweets – the smell alone could rot your teeth – is hardly in keeping with the magnificence of the venue.

Yet given some of the poor decisions already taken by the council's planning committee, it is hard to feel confident that this incomparably lovely avenue is in safe hands. One member of the committee says the idea is to create a "more authentic" space. I'm not sure what that means, but it sounds like double-speak for attracting lucrative footfall. And while pubs won't apparently be allowed onto the street, this relaxing of regulations extends to George Street, Hanover Street, Frederick Street and Castle Street. Like it or not, the face of the New Town's commercial district is set for a facelift.

With the demise of House of Fraser at the West End, now transformed into a whisky experience, and towards the East End the once-beloved Jenners department store due shortly to close (rumour suggests it will become a hotel), the heart of the city is struggling to keep up with bewildering change. Fortunately, nothing so awful is in the pipeline as the notorious proposal some years ago to build an elevated shopping mall in the gardens. Perhaps the most worrying aspect of a less stringent commercial climate is the signal it sends, and the trend it looks set to deepen.

Wherever you go, Edinburgh is turning into a visitor attraction, a living museum and gallery. Useful shops for locals are a rarity. In their place is a proliferation of chic cafes, glitzy on-trend eateries and luxurious hotels, all pandering to the tourist market. Thanks to the make-over of old premises and investment in new, the capital has a superficial shine, a high-cost stylish patina. But as Dickens's Mr and Mrs Veneering showed, putting your faith in appearances is risky. Yes, it creates jobs, though mostly of a lowly-paid, transitory kind. But at what cost? Do people make the trip to Edinburgh for its pubs and coffee shops, or to soak up the atmosphere of culture, history and daily life that, over centuries, have made its name?

Princes Street has undoubtedly been in need of improving its image for a long time now. Some initiatives are to be welcomed, such as the Quaich project, to renovate the run-down Ross Bandstand, and to "wild" the western part of the gardens, so they look less like a postcard from the 1950s and rather more invitingly freeform. While that is a laudable aspiration for one side of the street, however, the other is in danger of losing whatever soul it has left.

I understand that the council is in a difficult position, trying to safe-guard the future of a district caught in the retail nightmare of swiftly changing, quixotic customer behaviour. That it is hoping to welcome a greater diversity of trade suggests that in one aspect at least, human habits are unchanged: eating and drinking and watching the world go by. In fact, we are consuming far more than we ever did before, willing to spend money as well as countless hours sipping lattes and beer and scoffing burgers and sushi. So much for austerity. When it comes to leisure, wallets fly open.

There would be nothing wrong with broadening Princes Street's commercial scope if you could trust those at the controls. Sadly, I have no such faith. On the evidence of recent years, the city's development is geared towards immediate gratification, mainly for migrating flocks of cash-splashing customers. Where is the long-term perspective, tailored to the true character of the city, and to the requirements and concerns of those who live in it? Why bother to ask. Such a perspective requires serious thought, knowledge and imagination, luxuries the current decision-makers don't want to afford. As they say, Rome wasn't built in a day – but a theme park could be.