I've never done Buffalo Bill's, so I can't really comment on if it should be saved. And while I can appricaite that some will be sad to see it go, I can certainly see why it's likely to close. Not only the cost, but the space it occupies it prime-real-estate for expanding the village.
Disney on Ice and Cirque are good shouts for potential replacements. Both of which could easily go inisde the existing Bill's theatre. However, as I've already said, that's a decent size chunk of land that could be made into something else.
Theatrical sounds more likely, as they have a purpose built theatre at Shanghai Disneyland's equivalent of the Village.
As for the Village as a whole, no question, it needs a lot of work. The '90s called.. they want their style back.