Interesting announcement. I never saw this one coming either, but I think this may bring more harm than good.
First, DPS would have really limited the attractions, in my opinion. It would have made the focus on those marketable franchises only, and that would be bad. This is really much more broad yet limited.
Second, going along with this, I think that WDW is the ONLY place that could have a Hollywood-oriented theme park. California wouldn't work too well because the real thing is just down the street (sort of like the idea behind no Pirates at WDW, except, Hollywood IS in our time period). Having said that, the allure of Hollywood entertainment has really been iconic in American culture. While the rest of the world certainly appreciates it, I think it makes much more sense for an American park where the culture evokes images to just about every member of the public. So, that left Disney-MGM as the only place a Hollywood named and themed park would work.
All of that considered, I am looking forward to what this may bring. I personally like the "Disney Studios" name a bit more, but I think people would still associate it with a working studio then. This separates it a little bit and treats it more like a park, a celebration of Hollywood.
I also think this limits (in a good way) the themes they are working off of, so the sections of the park can be more specifically deliniated. You have the glitz of modern HOllywood down Hollywood Blvd., the old glamour of Hollywood down Sunset Blvd., Feature Animation on Animation Ct. and Pixar Place, a living set of City St./Streets of America.
All you are left with is a good backstory for the Lucas area which could easily be added to for action films/special effects (I like the latter), and then the Echo Lake shores. Well, we have one major area left: Television, and, low and behold, you have the ABC theater there and the 50's Prime Time Cafe which really draws much of its inspiration from 50's sitcoms.
Finally, the backlot gets scrapped to be replaced with an expansion area, or gets changed into a new style of attraction.
Seems like a pretty easy transition for those areas, and they all now directly relate to the celebration of the memory, the makings, and the magic of Hollywood (or some other tag line relating to the how, was, and is of Hollywood).
Just my $0.02, of course.