It is most definitely a classic. I would rate it in the top ten attractions of Disney World and certainly the #1 attraction in Disney's Hollywood Studios (followed closely by Muppet-Vision 3-D). It has, in fact, been updated before - the film clip portion at the end has gone through a few incarnations. But, I know you're asking more about the big set scenes. Could some of them be changed out? Sure. Tarzan has always looked a bit on the gimpy side, the Fantasia movie clip is a cheat (since everything else involves Audio-Animatronics), and in general the characters could use a state-of-the-art tech update...akin to the recent AA updates in Spaceship Earth. The Ripley AA needs a decent face, the aliens could be a bit more menacing, the Busby Berkeley scene could use more motion (or redo it into something like the Fred Astaire Dancing on the Ceiling number from "Royal Wedding"), etc.
I don't believe massive changes (ie. changing out all the movies) are necessary. This is still that Park's crown jewel, it's just in need of a good polishing.
