I dunno. Harvard Square's always been changing. I was walking through there yesterday and nothing a number of new restaurants and cafes--most of which weren't any sort of chain. You note Casablanca and I hadn't been there for years before it closed; IMO it turned from a sort of funky place to another sleek midpriced restaurant/bar probably a couple decades ago.

My impression is actually that it's the Kendall Square to Central Square to Harvard Square corridor where there are new shops, restaurants, etc. going in these days. For a time, the center of activity seemed to have shifted to Inman Square but I don't sense that's so much the case any longer.

From what I’ve heard, Harvard Square was a whole lot funkier 40+ years ago. It’s been consistently trending toward gentrification / yuppification from then to now, with ever fewer interesting shops run by weirdo oldtimers and more and more stuff that you could find in any upper-middle-class neighborhood anywhere in the country. Not to mention bank branches on every corner, and much less social/cultural diversity among the neighboring residents.

That's probably somewhat true. (And it's certainly true of Central Square--though, to that, I pretty much say no loss.) But the advent of chains like Starbucks and Peets is pretty much universal and there's probably still a fair bit less of that in Cambridge than in other places. Sure, various old institutions close their doors over the years--and what replaces them is inevitably not as "funky"--but there are still a lot of locally-owned stores and restaurants in Harvard Square that have been there for ages.