I don't understand the hesitancy to use the theatre for an icon. A stylized version of it in MDE will not take away any business from the actual Grauman's/Mann's/TCL theatre in Hollywood. The three Disney studio style parks always have had weird places for icons or had identity crises, but using Tower of Terror feels especially odd to me. It's not only NOT on the main entrance path, it is in a different land than the one you enter and you have to take a sharp right almost in same direction you came to view it the way it was intended. I'm not opposed to projections on ToT, like another poster said in this thread it could be used very well to enhance the theme of the attraction. Something needs to be done about the icon problem, but they're content with Tower for now and you can't get rid of the Chinese Theatre now for the foreseeable future with the theming in MMRR queue. I love Hollywood Boulevard as it is, though a refresh with a big hub overhaul with trees and an actual trolley route could be great if done right and could give them an opportunity to continue to tone down (or at least hide) the soundstage look which isn't present anywhere anymore but the hub and animation courtyard, which should go too. It kinda feels like the park's overhaul just stopped 3/4 of a way through. There's a lot I would do to enhance MGM, but I digress.
