Whether or not this is the best approach, I'm assuming they were looking at low-floor systems like Portland's when they were looking at the stops. The City's LRT guidelines going back to at least 2010 state that they're looking at smaller scale stations. The new "stops" along the Valley Line look a lot like what the MAX stations looked like when I visited Portland a few years back - small scale, walk-up-and-hop-on-the-train sort of stops. Check out this
Google Street View of one of their downtown stops if you're curious. Even compared to stations like McKernan-Belgravia, the small scale makes it feel a lot less obtrusive in the neighbourhood. It seems to me that the goal all along was that it would feel more like a neighbourhood transportation option - I mean, correct me if I'm wrong, but I don't think the City of Edmonton has ever presented this as a high-capacity, high-speed transportation link.
I'm assuming the reason for the scale and "station" designation at Davies is the park and ride combined with the bus station as a hub, with future TOD (office/commercial and not residential, I'm guessing). Because it's not in a residential area, the small scale stop would feel (to me) even more out of place than an elevated station.
I'm not arguing that the Valley Line should have full-scale stations or that this new system will be perfect - I think time will tell if they took the right approach in planning. But if the plan for the line all along was small-scale neighbourhood stops (which is what it seems), I think they've executed the plan well.