Hardware was very expensive, often dwarfing the salaries of the programmers hired to tend it. User interfaces were primitive by today's standards. Another reason for the popularity of the waterfall approach was that it exhibited a comfortable similarity to practices in more mature engineering and manufacturing disciplines. Today's designers are confronted with a broad onslaught of changing requirements. Customers are used to more sophisticated software these days, and demand more choice and flexibility.
User interfaces are complex, both externally and internally.
Indeed, we often dedicate an entire tier of our system to their care and feeding. Change threatens to outpace our ability to cope with it. Master plans are often rigid, misguided and out of date. Users' needs change with time. The fundamental problem with top-down design is that real world requirement are inevitably moving targets.