While I would usually agree, it does make some amount of sense in this case due to a few factors. First, a new coaster, which they obviously wanted to build for Monsters, works best on the south side of the park, hence the retheme of the existing area. Second, Aerosmith was due to go sooner or later, and Muppets Mayhem is a super easy vehicle for that. Third, there seems to be some desire to revive MuppetVision in another form, and the Villains venue could eventually work for a similar or related experience. That said, I think that it would remain on a very small scale and never subsume additional land from the Animation Courtyard plot, but I could see RNRC plus the theater becoming a new microland. Just rebuild the fountain in the rear courtyard and you're back with practically zero space wasted on what I assume must've been unpopular Muppets dining and retail considering how long the shop was shuttered.