I used to live in a 20s so-called conservation area and most people had the idea that when building a new (infill) property it had to look like all the 1920s houses. The conservation officer told me that was a terrible idea as it's more or less impossible with modern building methods and regulations, and he'd prefer to see a really nice piece of 21st century architecture.
You just hit my wheelhouse here as I used to be an Architect for 30 years.
It isn't an either-or.
Yet it is often framed like that.
Contextualization is SUPER important in urban planning, it came about as the result of 40's-60's modernism which during its time was seen as the Rx to urban woes. Problem is, it wasn't at all.
Plus, like everything else, there was GOOD modernism and bad. The latter being done by architects and developers of very questionable ability, yet as it beccame the norm it was produced ad infinitum and we also lost a LOT of urban historical fabric as a result.
Jane Jacobs - The Death and Life of Great American Cities...required reading for anyone interested in this sorta topic. The first and greatest sociological study of what modernist urban renewal did to neighborhoods and societies.
So...what happened in the 80's was a huge BACKLASH - again based upon a very SOLID sociological and architectural INTENTION, but sadly carried out in a very pedestrian manner (both physically and how codes were created and passed). The IDEA that where there is a good amount of historical urban fabric remaining, new development should reference it in things like massing, materials, use, etc...is honestly undebatable. The PROBLEM became, this was misunderstood or misinterpreted enough to become "you have to make your new building LOOK like an old one". Those two things are not synonymous.
So...and stick with me because this...oddly enough seeming digression...is about to CIRCLE BACK to Jazz today (it wasn't my intention when I started writing this reply - ironic, no ?)....