That airport (Toronto Buttonville, CYKZ) has been affected by city building up around it. When I first started to fly there in the late '70's, it was fields all around. Now, it's all built up for miles in every direction. Aside from some awkward clear spaces around nearby expressways, there are no suitable off airport landing sites nearby. So, though I don't endorse a turnback EFATO, I can see why the instructor in the other situation would try (and not succeed). I'd been there with my plane a few days before the student hit the hangar (parking about 100 feet from where he hit), and reminded myself to fly a high, tight circuit, just in case. So there is some mental pressure operating from this airport, resulting in faster finals, awareness of noise sensitive areas, and nowhere to go in the case of an EFATO. Pilots tend to fly faster approaches as there are several commercial buildings under short final. At least one of those roofs has been a crash site.
This airport has been slated for closure for a decade or so. The long time owners, Mr. and Mrs. Sifton were aviation lovers, and operated the airport more out of passion than profit. Mr. Sifton passed on years ago, and Mrs. Sifton has retired. Their son took it all over, and made the effort, but the incredible value of property, now in the center of prime development area, made the airport less attractive, and the income more so. We were told that the airport would close many years ago, and the big operators all moved to other airports. There are legal battles about how the property could be used for development, so multi hundred million dollar sales have been stalled. It's location is so attractive for east Toronto residents, that as it never completely closed, local owners continued to use it. The oldest maintenance shop, there since the '50's, still operates. So this flying school moved there from another local airport which has actually closed. Their luck has been poor recently.
But, none of those factors are an excuse for the student leaving the runway to the right, and not getting the plane stopped before he hit the hangar, there's lots of room around the runways to get a 172 stopped without hitting something. This accident was the result of pilot (and instructor) error, rather than environment.