The problem with the Mermaid Ride is that it's all shine and no substance. It lacks genuine fun and clever showmanship - something the Mermaid Show actually has lots of, a bit dated though it is. There are reasons the Show has played basically unaltered for almost 30 years while the Ride got a correctional refurb barely 2 years after its opening. The show gets the job done.
They took a more Presentational approach to the design of the ride rather than a more Representational one, with the exception of a few animatronics designed to impress (though Ariel, as mentioned, misses the mark) and its seriously sculpted queue and facade. Otherwise, the ride does more to show you an illustration of Ariel's world than to ever make you feel like you're actually in it. Which is a choice, but a disappointing one given how rich Ariel's world is and how ripe it is for translating to an exciting dimensional environment.
Peter Pan's Flight takes up nearly 1/3rd the footprint of Mermaid, cost way less money, and features none of technological advances of the last 50 years, but it endures because of its engaging concept, clever conceit, and elemental execution. Mermaid the Show has much more in common with Peter Pan's Flight than it does with Mermaid the Ride, and that has always been to its credit.
It's always a shame to lose something after such a long run in the parks, especially if it's due to finanial reasons rather than creative ones. I won't pretend Mermaid didn't enjoy a longer life than perhaps it should have - I'm a total sucker for this kind of show, but I think in reality we should have seen other additions to the parks that took a page from its book instead of seeing this one hang around quite this long. Nemo and FotLK aren't really the same. I doubt we'll see the likes of this kind of show at WDW again anytime soon, and that's not even considering the present climate.
Hopefully if something really is working its way through the pipeline it's coming soon and will be a strong addition to the park. DHS certainly still needs more to do and not less, but the loss is always easier to forgive in the name of a worthy successor.