You have to pick one or the other when choosing your development strategy. If you focus on customer collaboration, you could end up giving away too many freebee features that should have been feature requests and billed.

If you have a design iteration plan, how do you respond to a showstopper that makes the plan infeasible if you are on a strictly waterfall design plan?

Each has it's trade offs so you can't always pick one or the other willy-nilly or else you don't have a design strategy at all