It's hard, some handle it better than others, but it's naive to say that the downsides are trivial and have little to do with being in a co-op program.
Deadlines, school, and stress are part of being in a program. Co-op or not.
It's taken me a while since graduating to realize that most people - tech or otherwise - consider interviewing to be stressful and unpleasant. Waterloo ground that out of me early on, I enjoy interviewing. Going into an interview room doesn't even begin to stress me out - and that's gotten me much further career-wise than anything else.
My interviewing and job-searching ability, and my confidence in it, has given me insane leverage in the market.
I for one am glad that Waterloo's trial-by-fire job-hunt (find a job in your 1A term? sheesh) happened to me. Negotiating, interviewing, and networking are 3 skills that most people leave school knowing almost nothing about, but a Waterloo student can easily rack up 70+ interviews by the time they walk out the door, and negotiated a dozen or so offers.