I don't know about the East Village specifically but, apparently, the notion that Manhattan skyscrapers are only built where the bedrock is close to the surface is false.

http://observer.com/2012/01/uncanny-valley-the-real-reason-t...

(And, by way of another data point, the tall buildings in Boston's Back Bay are built on landfill.)

Those are historical reasons. With modern construction techniques skyscrapers can be built virtually anywhere. In any event even eleven to fourteen story buildings which the geology could certainly support (Stuyvesant Town and the Riis Houses are those heights), would be a big improvement over six story walkups.