It would only really work if the queue and load were off island and the track/ rock structure spanned multiple floors. TSI is a large island, but not that large.
There's also the huge chunk of land behind TSI and Big Thunder... could fit Western River Expedition (family dark ride in rafts), Discovery Bay (3 attractions - E ticket, D ticket and C ticket) and a Sleepy Hollow attraction. If not Discovery Bay, then Geyser Mountain (similar to ToT - maybe KUKA arms included?), a stunt show and revamped Tom Sawyer Island could swap with it.
I wouldn't mind the queue/show building taking up parts of the closed/abandoned areas, but I wouldn't want to see a landmark attraction close down for good. There's 40-50 acres of unused land outside the berm that could be incorporated into the guest-accessible areas if TDO was willing to plop down the money necessary for expansion.
MK's main goal should be to provide teens/adults more to do (I count 9 major rides/attractions for teens/adults - Splash, Big Thunder, Space, POTC, HM, Jungle Cruise, SDMT, IASW, Buzz. DL has 12, DCA has 7, Epcot has the whole park except Three Caballeros and Nemo, DisneySea has 9
Even DHS and AK have 5 each and they're widely considered half-day.
- Adventureland: Fire Mountain (possibly Indiana Jones themed if stunt show closes for Star Wars) and Aladdin show (the expansion pad behind Jungle Cruise and POTC is enough to fit a sizable show and E-ticket... maybe a Fantasyland-style dark ride?)
- Frontierland/Liberty Square: Western River Expedition, Geyser Mountain, stunt show, renovated TSI and Sleepy Hollow attraction as a Frontierland/Liberty Square revamp
- Fantasyland: IASW relocated to World Showcase, old showbuilding bulldozed to open up sizable Fantasyland expansion (not just wide open spaces, but actual maximization): Arendale (trackless dark ride, M&G and Junkyard Jamboree style flat ride themed to Olaf), Bald Mountain (state of the art E-ticket thrill ride - 54"), Wonderland mini-land (Tea Cups, labyrinth, Cheshire Cafe and Caterpillar kiddie coaster) and Pleasure Island mini-land (Pinocchio family shoot-the-chutes - 38") taking up IASW and the space behind IASW/Mermaid... Peter Pan uses old Pan bathrooms to expand, Philharmagic is relocated to Town Square (in order to meet Mickey, you have to watch the show - easy way to get guests to watch it despite the Main Street location), Philharmagic's building is used for a Mary Poppins dark ride.. the Princess Fairytale Hall has been moved to Arendale and the old building is used for a Sleeping Beauty/Maleficent dark ride. A mini-swings ride themed to Pooh replaces old Tea Cups, Cheshire Cafe is changed to Rabbit's House (Cheshire is then relocated), the old Barnstormer space is used for a Casey Jr. dark ride/track ride hybrid (21st century version),
- Tomorrowland: Laugh Floor is relocated to DHS, Speedway and Stitch get replacements, Space and PeopleMover are given revamps, CoP gets an upgrade... in Laugh Floor's place... a light-hearted show involving a misfit alien named Plectu (Plectu's Intergalactic Revue). where the old Stitch attraction was, GotG sets up shop as a more mature, adult-skewing but not overtly dark/intense replacement. Buzz gets revamped as Big Hero 6 or as a exploration of an alien colony (either one)... Speedway is replaced with a family E-ticket themed to Wreck it Ralph (Sugar Rush side for Fantasyland/little ones, Hero's Duty side for Tomorrowland-teens/adults) similar to RSR with EMV vehicles. Behind the old Speedway, a people-eating Horizons meets Adventures Through Inner Space-style dark ride, Flying Saucers clone (enclosed and higher capacity version), time travel show, and TRON speedbike coaster - there's tons of room for new attractions behind Speedway and Space. The Incredibles show is replaced with a Stitch stage show (more futuristic and keeps Pixar at DHS)
- Main Street: the Railroad gets revamped to feature extensive and immersive dark ride segments in between each station. Adventureland features Jungle Book, Lion King and Tarzan, Frontierland features Woody's Roundup and Lone Ranger, Liberty Square features the Revolutionary War/Pilgrims' arrival on Plymouth Rock, Fantasyland includes Tangled and Oz, while Tomorrowland features John Carter (would look breathtaking as a theme park attraction) and The Black Hole (mainly getting "sucked" into a black hole) - similar to Hogwarts Express but there would be AAs, sets, projections and SFX all combined for a seamless experience... HE meets Backlot Tour at Universal Hollywood - it'd be an opportunity to showcase the lesser known Disney films
Of course, my insane expansion would never happen
overall, I definitely think a people-eating family dark ride like WRE would be welcomed as an opportunity to begin removing the huge bottleneck by Big Thunder/Splash... I wouldn't want to put it somewhere that makes future expansion impossible though. Leave room for a guest path to wind behind HM/IASW/Mermaid/circus tents - use the land to add 8-10 more attractions (park needs to catch up to DL's attraction count)
