It is the perfect attraction for Epcot. Epcot is a permanent World's fair and a celebration of countries around the world. "it's a small world" debuted at the World's Fair and would be the absolutely perfect transition attraction between Future World and World Showcase. Put a tower of the four winds type design in front (and perhaps throughout Future World) and it would really look great.
The opposite side of that is that I would argue it doesn't belong in Fantasyland. We always argue that all character based attractions should be put in Fantasyland. Why then, is the opposite not also true? "it's a small world" isn't driven by Disney characters so it doesn't technically belong. Moreover, it's removal opens up a huge area of land that would have been a much better fit for things like a Frozen attraction, more Tangled content, another restaurant and potentially much more.
