Seems like WDW ended PI much for the same reason they'll eventually abandon Disneyquest. Both of them are moneymakers, but not at the sort of profit margins they'd prefer, especially when they realized how often they would have to renovate or re-innovate or re-theme to keep it current. The philosophy seemed to be, let someone else take those risks while we reap the rewards, assuming retail or restaurant space at WDW would always be in demand. I think that's a decision, to a degree, they now regret.
I'm not much of a nightclub guy, and with kids now, going to PI, were it back, would be a moot point for me. But I did enjoy CW and AC quite a bit, and I'd usually step into 8-Trax and RnRBC for at least a little while. I can't honestly think of a way to unscrew that pooch.
For me Disney's biggest issue when it comes to non-theme-park related entertainment is their mixed messaging. You can even hear it, to a degree, if you dare tune in to Disney Radio or watch their programming on The Disney Channel. Everything is OFF THE HOOK! OUT OF CONTROL! LIKE THE FUNNEST THING EVAH!!! Except it's all meticulously controlled assembly-line-created fun for a premium price. They want things to be loud and crazy and fun, but also orderly and controlled. They want to provide a location for people to be impressed and wowed enough to open their wallet and spend more money, but they don't want to do the wow-ing.
Honestly, were it not for the fact that it would cannibalize another WDW location even more, I'd say the ideal solution would be to set up DTD like a Boardwalk district, with games of chance and skee-ball and Disneyfied carny rides (using the old ABCDE-ticket method of riding to keep admission to the area free), interspersed with restaurants and shops and lower-key nightclubs geared more towards comedy and the less-rowdy music genres (lounge, jazz, etc) as well as an all-ages venue or ampitheater for "concerts in the park" style entertainment.