The Treehouses stayed, though they were not used for Guests for many many years. All other buildings with guest accommodations were torn down and replaced with the SSR villa buildings. (Most of the front desk and other support buildings were kept and re-purposed to their current use)
The reference to tearing down the treehosues was that the *old* treehouses were demolished and then immediately replaced with what you see now. The new treehosues eliminated the lower level, expanded the upper level slightly, and by doing so actually decreased the square footage touching the ground (just support posts and the central utility column), which is how they were able to get approval from the state Water Management people.
-Rob