They covered up one well-placed and scaled illusion to sell "stuff".
I'll go back and check my reading materials, but if memory serves me the Chinese Theatre wasn't a scaled illusion of a replica. They built it real size. Again, a shame to cover up such good work.
In comparison, the hat looks like a prop from Disney's All Star Resorts or Disney's Pop Century Resort. It does nothing to put you in another time and place.
No offense Scoop, but I just have to agree with the Horsecollar on this

.
Anyone new to the Studios (as most are) have no problem with the hat,location or anything else. Old fuddie duddies that hate change or the idea that WDW is designed to make money are bothered.
It is not often there is an issue that Baron (BTW - thanks for the kind words) and I are in lockstep on, but this is one. It has nothing to do with fuddie-duddiness or resistance to change. Baron and I argu...............um..............discuss that all the time, usually from opposite sides of the fence. This has more to do with appreciation for the Show that used to be put on, was intended to be put on, in the Studios. As much as Disney might have made some mistakes with MGM, being the first park to open light on attractions, with a staged implementation being the goal, there are some things they did very well. The design of Hollywood Boulevard right up to the theatre was one of them. Yeah, I remember the Empress Lily (and the restaurants were much better before the change

), but no one is going to put me in the fuddie-duddie category, and I am a long ways off from the retirement home

.
I'm with Matt. The hat can have a place, just not where it is, Mr. Heads observation aside. Heck, I think it would have been great outside the ticket windows. Lots of space, throw a marketing icon right in your face first thing as you approach the park, without ruining the atmosphere that existed so nicely.