In order to do this makeover correctly, they'd need to significantly alter darn near everything about the current show. Because once Stitch accidentally beamed into the room, how can it be scary? Despite some wild antics, Stitch is from a kid movie and kids see Stitch as way more lovable and funny than they do scary. Therefore, there's no way they could successfully do a prolonged lights out, and most of the psychological effects with the seats and shoulder bars would be ineffective in a lit room.
Can't see how they can do this and pull it off with the public. People have complained enough since '55 that Snow White's Scary Adventures is too frightening for little ones and not eventful enough for older kids and grown ups. Hence, it's been considered one of the oddest received rides by guest's reactions in Disney history. Why does it stay in the parks? Because Snow White and Mickey Mouse are the two major things that put Walt on the map. This is also why the ride (particulary the one in DL) has been altered so much over the last 47 years. No way Snow White's going anywhere, but no way will they ever make this ride perfect w/o completely starting over.
I think this alleged Alien Encounter makeover is nothing but a rumor.
