Simple, developers dislike it because it leads to very messy code, quick fixes that lead to messier code, and a stressful work environment. On the other hand, waterfall leads to missed deadlines, cost overruns and applications that don't meet needs.

I think we need something in the middle. Does anyone have any ideas?

I suspect the fix will be on the type of software app that people are writing rather than the way apps are written. Monolithic apps are hard to write and maintain so we need to think small and generalize software something similar to lego bricks.