As much as I like this idea for Fantasyland, I don't think it would look nice as close to the castle as it is...maybe somewhere else.
I'm actually surprised WDI didn't convert it into another darkride, but the Disney Princess craze is, in fact, crazy! I don't remember the exact article, but I think an Imagineer said that making a new darkride here wouldn't work because the space is too small to meet expectations of current/new darkrides being built, especially compared to the new, huge LM attraction opening later. I have two ideas, actually:
1) It is very close to Cinderella Castle, relocate the carousel to where Dumbo previously was to build a grand fountain where the carousel used to be with fancy carriage rides (Disney could even make it a separately priced experience) around it and the castle area making it a whole new experience as you walk into the main entrance of Fantasyland. In place of Snow White, build Lady Tremaine's Manor. The grand enterance (AKA "living/family room") leads up to three doors, Lady Tremaine's, Anastasia's, and Drizzela's (spell check :veryconfu ) with them meeting and greeting guests in front of them with an advanced audio animatronic Lucifer purring at guests while they wait in line. Beyond the Staircase and villain M/G (I personally love Disney villains and I don't think they get the respect they deserve) is the Cinderella Ball type experience previously taken away from the Fantasyland expansion.
2) A whole new type of simulator ride adding some family-friendly thrill to Fantasyland! Shrink to the size of Cinderella's mice (Jaq, Gus, Suzy, etc) as they take you on a mice-sized tour of Cinderella Castle (like Star Tours) through special places like the kitchen, the dungeon, the castle moat, the Dream Suite, Cinderella's Royal Table, and more! With Jaq and your animatronic guide and Suzy and your stewardist, jump inside your larger than light, motorized knight's armor's helmet on a 4D adventure you'll never forget! PS: Watch out for Lucifer!
ALSO- IF ANYONE WANTS ME TO DICUSS IN DETAIL ABOUT MY 2nd IDEA I WILL, BUT NOW...I'M TIRED