DD5 was very excited to watch fantasmic this last trip (first time for her was at 2.5 yo), but she fell asleep. We still managed to get into the theater, but she would not open her eyes. Truth is she is a bit scared by fantasmic. She watched some parts, but the bottomline is that she 'agreed' to it just to watch the last part, where all the characters pass sailing on Mickey's boat.
If you ask me, it can be scary at times, but they can choose not to watch some parts.
I think that in the end it doesn't end up as a scary experience, so that they'll have a bad memory about it.
But then again, it depends on each kid.
Have fun,
Mx