MM, this sort of possibly overpriced, touristy complex is not at all unique to Cape Town. And while it is true that this (and this type of) complex is for some their only destination, that is as much their choice as due to hype.
Boston has what is considered to be the first of these complexes that revives/renews old commercial buildings/areas and turns them into a tourist magnet. Ours is the Fanuiel Hall Marketplace, once filled with meat, fish, and produce wholesalers, now full of shops, many of them overpriced, and restaurants — and adored by tourists and locals alike. It has been copied in many other cities worldwide and Cape Town's V&A Waterfront is just one of many. All these complexes, I believe, have been extremely successful because the majority of the public loves them, as they concentrate a variety of shopping and restaurant choices in one place and overall have a nicer ambience than most malls.
I personally rarely venture down to the Fanueil Hall complex here in Boston — amongst other things, it isn't particularly convenient for me — but those who work and live downtown love it, both for lunchtime shopping and eating and for after work hours. And it is definitely a tourist destination, but not exclusively. And while I may deplore it, I think that there are many, locals as well as tourists, who are willing to pay the inflated prices for the convenience of having so many choices in one place.
I'm still not even a big fan of malls, since I am fast becoming an ancient dinosaur, but most people under 50 (at least in the USA, and to some degree elsewhere) grew up with them, so this "everything under one roof" is the norm for them and is preferred. Complexes like the V&A Waterfront cater to that preference. As BB points out, not all the shops and restaurants are overpriced, and while tourists may not be able to easily discriminate, locals can and likely do. I, as a not at all typical "tourist", find the Waterfront complex convenient because it is close to where I stay and is one of the few places that is open late (not to mention, safe for a solo female) when I need to pick up groceries or grab a snack after a long day out and about.
16-20 April Cape Town
21 April - 5 May Darling
6-11 May Joburg