The question still remains whether this will use the entire building or whether part of it will be available for other uses (e.g. perhaps a new M&G area). After all, we are just talking about 1 track compared to the two in the similarly sized soundstage next door.
Why can't we have both? Increasing capacity to TSMM and Soarin' is perfectly reasonable given the demand for those rides and the parks' attendance. You can increase their capacity and add new rides (which, at least for DHS, does seem like it will be happening) -- it shouldn't have to be either/or.