This makes complete sense. Its already exists and won't cost very much to house in the building that was already primed for 3d/4d films.
I saw the show for the first time in Magic Kingdom (Florida) in January. Its pretty good - good range of songs and characters, and impressive 3D, its a fun Disney singalong. Sorry MJ fans, but its a definite improvement over Captain EO (or nothing at all, as is now!). Can't say as I noticed the "4d" elements very much, but I liked the show. At 12mins or so it was a decent length and a fun time.
It would be easy to cheap out and just show this as a 3d movie only. I really hope they do it properly and add the proper theming to the outside and inside of the building - including the animatronic Donald and smoke effects at the end of the show.