Before attacking the circus theme, consider the amazing thing WDI is trying to do with the FL makeover, and how a popular attraction has tied their hands.
Rather than haphazardly plopping a bunch of random experiences next to each other (as Walt's original Fantasyland had done), WDI is finally trying to give FL a cohesive story.
There is a castle. There is a castle courtyard. There is a "fantasy forest" beyond the castle walls.
Where, in any of those thematic areas, do you recommend putting a bunch of flying elephants??
Dumbo does not really fit inside the castle courtyard (one can argue that flying pirate ships and international boat tours don't fit either, but at least the facades hide the attractions inside. Dumbo is out in the open.)
And I cannot imagine a way to re-theme Dumbo to fit alongside Gaston's Tavern, Prince Eric's castle, Pooh's forest, and the Seven Dwarves' mine.
So at this point WDI has three choices: get rid of Dumbo, randomly drop it among the other FL attractions, or try to build a "mini-land" around it to make it a fuller experience.
I think everyone will agree that WDI cannot get rid of Dumbo. It is a classic Walt attraction, a fan favorite, and among the most recognizable park icons.
And it appears that WDI is trying to get BatB, TLM, Pooh, and Seven Dwarves Mine to blend together as smoothly as possible. Dropping in some colorfully-dressed elephants would interrupt that thematic flow.
That leaves creating a "mini-land" for Dumbo, as it appears WDI is doing.
Rather than just installing one lone attraction out in the open, it appears WDI is trying to bring some additional "story" to the attraction.
Placing Dumbo near the railroad tracks makes perfect sense.
As much as I don't love the idea of incorporating Barnstormer into "Dumbo's Circus", that attraction has also tied WDI's hands. It can't be economically moved, and it is too expensive and popular to simply remove. Yet I cannot think of any other franchise that could take it over and also have room to create yet another "mini land" around that.
I guess that the Mad Tea Party could theoretically moved closer to Barnstormer to create a Wonderland "mini land". But realistically, that seems like an unnecessary expense (I'm sure Dumbo would also be kept in its current location if there wasn't the need to double it's size and build a large indoor queue building.)
So given that WDI needed to move Dumbo somewhere, the train station is an important element of the Dumbo story, and Barnstormer is permanently anchored on that side of FL (far from any other franchise attraction), it really seems WDI had no choice but to go with the circus theme.
Unlike Dino-rama and Paradise Pier, in which WDI was forced to justify the use of cheap carnival rides, at least Dumbo comes to FL with its own rich story, characters, and sets. In this case, WDI is expanding the existing circus story.