This is a question I get asked a lot. Waterfall was never intended to be used in the way we have used it. Dr Winston Royce, the guy who created the paper from which the waterfall method was mistakenly drawn, said that Waterfall actually needed 5 additional things to reduce the risk of the approach. Some of those additional things Agile attempts to resolve, but back to the question at hand.
Waterfall works well when: