I like where your head is at on this one! Personally, I'm a huge Halloween, villian, and bad-guy fan. And what better island than Tom Sawyer's Island?? I always found TSI lame and really a waste. I understand it's downtime, but rather than having essentially dead space that few visit, why not use it as an attraction and draw some of the crowds with a Villain's Island like you said. The good thing to your point is it won't scare kids out of the blue. You have to go out of your way to visit, and parents know their kids. If their kids are generally skittish, don't visit. I think using TSI works because you're right by the Haunted Mansion, so there is a kind of tie-in with that. It doesn't exactly tie in with Frontierland or Liberty Square, but if you link it close to the HM queue, and put a back entrance/exit to Frontierland, I think you've got something. I mean, it wouldn't be any more out of place than Mickey & Minnie's RR is at Hollywood Studios.