As others have said, there's just not enough real estate to build a tower in the Jellyrolls/Atlantic Dance Hall footprint without impacting existing DVC villas. Plus, it would impact the canal and regardless of how any of us feel about the Swolphin, I highly doubt Disney wants to lose the boat traffic between Epcot, the Crescent Lake resorts, and HS.
If it were up to me, I'd build it on the existing BCV parking lot, moving guest parking across Epcot Resorts Blvd (or more sensibly re-routing the road), close to where CM parking already is. It keeps the new tower out of any existing sight lines, you lose no existing facilities, and it's tucked well inside the Epcot bubble. Of course, it would absolutely HAVE to have it's own dining and quick service facilities and other infrastructure.
Red rectangle is the new tower; yellow rectangle is relocated parking. Locations and orientation are just generalized. Tower could be rotated, parking could be closer to the tower, etc. Road re-alignment is just illustrative as well.
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