It was put there for the 100 Years celebration and was not designed to be a permanent structure -- they just decided to leave it up afterward instead of taking it down. The area it was in is very atmospheric otherwise, and the hat was always a big theme-breaker that took away from the illusion of the Hollywood streets. Also, it was getting rusty on the inside and generally looking run-down because again, not designed as a permanent structure.
I'd heard that they're planning to build a hideaway stage like they have in front of the castle at MK. They can pop it up for shows but have the area clear and usable outside of performance times. That sounds like a much better use of the space to me.