Wasn't WRE or some variation of it already ruled out with newer rumors of the Frontierland expansion?
The only info I can go on regarding WRE is what has been circulated online from models and descriptions. If this info is accurate, WRE would have likely called for a show building more or less the same size as Pirates. I'm not sure how accurate this placement or scale is, but here's a picture I found claiming where WRE's show building would have gone.
http://www.omniluxe.net/wyw/wre.htm
According to this site, it's actually an official Disney document, so it may be fairly accurate to the size and placement of WRE. The pink is apparently just the WRE part of the complex (not including the rest of Thunder Mesa). The land WRE would have occupied is currently mostly occupied by Big Thunder Mountain, WRE and BTM seem somewhat similar in size more or less.
The piece of land this expansion is currently rumored to be using is behind BTM, and above Splash Mountain. This land I suppose COULD be used for a decent sized show building, but there are several current obstacles in the area. There are several buildings back there, one of the smaller ones is the garage for the Big Thunder trains and you can't remove it (likely they won't move it either). I assume the body of water can be filled in. There's a service road back there, but it seems far enough off to the side and not a problem. I don't know what the other larger buildings in the area are used for. There's a particularly large one behind Splash Mountain that isn't connected to the ride itself.
EDIT- I did a little bit of image editing using a current overhead of Magic Kingdom and the old Thunder Mesa area plan above. I scaled and fitted the images together as accurately as I could manage and think I got a decent idea of the size of WRE's proposed show building. I took the WRE building and moved it over where the supposed Frontierland expansion is going, so you can get an idea how much land it would need and what obstructions need to be removed or circumvented.