I have seen many kids taken out of Fantasmic. It can be very intense for kids in that age range.
We took my nephew to see it when he was five, and he kept on saying that he didn't want to see it. I wound up buying him a Mickey Mouse light, and I told him that I got it from Mickey, and all's he had to do was hold it up high inm the air when he was scared, and Mickey would protect him. When things got too intense for him, he held that light up high, and he made it through.
As others have said, you know your kids best. If they scare easy, you might want to skip it for another trip. If they take the villians in stride when watching the movies, give it a try. And be prepared to take them out if it does get too intense for them (nothing can stress out a family and ruin an experience for a parent, a child, and those around them like a kid being forced to do something they don't want to do).