@Morningsider
"The Council seem unusually scared that the money men will do a runner if they demand higher standards from major new developments. There is a pile of cash to made from property investments in Edinburgh. If one developer doesn't think it can wring enough profit from a site while meeting the required standards, I'm sure another will be happy to take a punt."
I think it's more that the council is well aware that, given the piles of cash that you so rightly point out are there to be made from property investments in Edinburgh, developers can easily fund lengthy planning battles with the council. The council, on the other hand, operates on desperately tight budgets and has to make hard, unpleasant and very likely unpopular decisions about which battles to fight, especially since developers can appeal a planning rejection up to the Scottish Government, rendering a good deal of the council's expenditure on the process up to that point money down the drain. It's possible that the council sees a better deal overall being achieved by gaining some quid pro quos from the developers, so at least they might get some money to fix the roads and maintain bin collections, thus keeping some of the more vocal resident lobbyists off their back for a while.
That doesn't mean that I don't think that the system sucks.
BTW, AFAICR the "presumption in favour of sustainable development" diktat originated in Westminster - although I must admit that I thought that planning was a devolved responsibility* so in theory the Scottish Government could have chosen to ignore it. (As others have pointed out, that word "sustainable" seems to have been inserted as a largely meaningless sop to people worried about building on the green belt - which nevertheless seems to be proceeding apace round where I live.)
* Only since 2008, it would seem link. However, that still precedes by some years the "presumption in favour of sustainable development" doctrine which AFAICT wasn't codified until the 2012 National Planning Policy Framework so I reckon the Scottish Government is still on the hook for adopting it north of the border.