That would be fun too. Though personally I'd love to see the creatures from the movie come to "life". And the Star Wars character M&Gs don't honestly do a lot for me, though to each their own. But a live band would be better than nothing.
That's what I had always hoped they would do with the Muppets (and what was originally planned) - at least the rumored Broadway Muppet show is hopefully on the horizon.
You guys are kind of hitting on exactly why I wish the Cantina wasn't the focus. Truth be told, as much of a Star Wars fan as I am (if you sent me to a desert island and said I could take 3 movies with me, they would be SW, ESB, and ROTJ, without hesitation), I find the Cantina scenes highly over-rated. Let's face it, parts of Star Wars itself in the first half are pretty dull as dishwater. Interesting, place-building, and historic - but dull. The only two real bits of action - Obi-wan using his saber, and Han and Greedo's little you-know-what contest - take place there, and yes, at the time it was neat to have that many creatures, etc. - but...the place itself, kinda boring.
What they should do (and they never would, namely because of the base subject matter which has been a thorn in it's side forever) is Jabba's Palace Court. That would be a perfect meeting of all the $$$ Disney likes - during the day it could be counter-service, at night an expensive, to rival Cindy's Castle, dinner show with several seatings. Audio-animatronic Jabba, Salacious, etc. - and humans playing the costumed characters. There could be a Jabba Meet and Greet room (open all day, in addition to Jabba at the dinner show) to sell those lovely PhotoPass photos.
And then...the merchandise. Jabba merchandise is extremely popular in general in Star Wars fandom (probably as a broad category more than any other type or even single character when you include all Jabba and his denizens and the ancillary products). Oh, and how a about a permanent place for those money maker "make yourself a little metal carbonite block" things they get, what $100 for? My God, they could offer a package with the meal that included it - what parent (or spouse) is going to deny their little (or big) Star Wars fan a chance to go home from Jabba's Palace encased in carbonite? Even at those crazy prices.
Not only that, but the theming would be so much more interesting. Jabba's Palace is just much more visually interesting than the Cantina. Even larger variety of characters, and tons of elements to work with and directions a show could go (from carbonite to bounty hunters to even Darth Vader - who appeared there once in a comic).
But...the Cantina is a "safe choice". No worries about "Slave Girls" (even though Hasbro has released "Slave" Leia products pretty consistently this century, it's always "Jabba's Prisoner"), or "will people be grossed out to eat by Jabba" LOL. I can so see the meeting if someone ever brought it up.
It's the same reason I am glad Universal got Potter. Disney would have never ever pushed the darker/scare aspects of Harry Potter and would have made some lame Soarin 2.0 (like they are likely going to end up doing with Avatar) focused on broom-flying. I feel secure with the Star Wars
films being with Disney (it's the best news I have heard about Star Wars in as long as I can remember), I can't help but think Universal would handle the theme park stuff better as much as I adore ST2.0, the cut-backs were obvious and Disney just didn't go for the platinum standard, and it's doubtful they will now when they don't have to impress anyone but the accountants.