I speak as a controller who has worked Class D for a good number of years. I have rarely had any problems arranging for a VFR to miss an IFR - not separated, just miss - and to avoid AIRPROXs by telling pilots about each other. Yes sometimes it's busy and it can be hard work but if the airspace can accommodate it I can fit in a few VFR flights.
The secret is not to consider FL85 to block two IFR levels but to apply the rules. Separate IFR flights and pass traffic on VFRs alongside clearances that put a bit of space between a VFR and IFR aircraft.
The problems usually arise when a pilot doesn't understand what airspace he's in or what service he gets there - not something that Timothy can be accused of! And, of course, with controllers who don't want to work with the rules.
My rant over - just to point out that not all controllers make life hard work!