There is a mountain of mixed up issues floating around in this thread. The massive investment Disney made was not for Magic bands but for the entire infrastructure of My Disney Experience which includes hotel reservations, FP+, Dining Reservations, swapping out turnstiles to tapstiles at the gates, Replacing every single room key reader on the property, replacing every single payment terminal on the property, and so much more.
The MagicBand is nothing more than the physical tool needed to gain access to that platform and the entitlements you have purchased for your visit.
The technology used by the Magic Band is pretty common stuff nowadays and is available in most every modern smartphone and most modern smartwatches. One of the barriers to them swapping out earlier to using something like an AppleWatch to replace the NFC functions of the Magic Band is that Apple has historically restricted access to that chipset in their phones to their own ApplePay platform only. If Apple (Developer COnference is on Monday) is going to open that up in the next iOS release, then Disney will have access to use the NFC chips in both Android and Apple phones to replace the NFC functionality used for theme park access and payment access. That seems like a win right there. They can integrate the entitlement access into the MDE app, and I can either swipe my phone or, in my case, my AppleWatch and gain access to my admission entitlement or FP+ reservation. When the services come available on iPhones (already available on most android phones), then no new hardware needs to be installed at any of these locations, just updated MDE software, and these devices can then replace a MagicBand for those services. You'll still be able to purchase MagicBands and use those if you want, or you can just use your phone or appropriate smartwatch. To me, that seems like a no-brainer.
As for the BTLE stuff that is used for things like on-ride PhotoPass, again, they just need to have the MDE app communicating, so the beacon on the ride sees it and links the photo/video to your MDE account. They could do this now if they wanted to but it makes sense to wait until you could complete replace the MB before starting down this path.
And for the privacy advocates (I'm one of them) yes, you can choose to turn off the BTLE access for that app and those functions will no longer be available to you.
This seems like an inevitable progression of the platform to me. They don't have to throw away, or replace any part of the infrastructure, just enable new devices to access the platform via software.