1) The University has been trying to get it's students out of Kenmore Square for years, not into it. New residential development is focused on centralizing students in West campus housing (StuVi, West dorms), improving existing facilities and dorms. There are plans for an additional tower in the Student Village complex, and a further out development which would include the parking lot beside the HoJo built up for residential and possibly another residential tower on the air rights beside the BU bridge.
2) Community resistance -- it has already been mentioned that the Hotel Commonwealth debacle has casted a harsh light on any future development in Kenmore. It would be very, very difficult for BU to gain approval from the City to tear down this building.
3) This strategic plan is entirely conceptual. The very nature of a strategic plan is that it changes over time to meet the needs of a University. I wouldn't put too much weight into what you see other than a few of the already planned structures (the East Campus Student Services Center, the Law School expansion, StuVi 3)
4) BU has a long history of renovating and upgrading historic and existing buildings. They have renovated almost every brownstone on Bay State Rd, some on Beacon, and South Campus in Audobon Circle. I think it is safe to say that if a building is structurally sound, BU does not demolish it.
My guess is that the aforementioned building will be incorporated into an adaptive reuse, and the 2 adjacent buildings (New England Photography and Bertuccis) will be demolished.