It looks like the perfect killer.
I'm not disagreeing with you, nor agreeing. I think they'd be fine, personally. Look at what Insomniac is doing. They're breaking away and making something new. Game Freak would be similar, they'd make something new and get backing because they have such a strong portfolio. They could even pull a Keiji Inafune and make something close to the original, but their own.
You're definitely right. I agree on the bit about Jade Cocoon and Digimon too, I loved those games.
I dunno if you've ever heard of the Pokemon Tabletop United roleplaying system, you should definitely check it out. I imagine that they could take that system and make one hell of an MMO.
It's so easy to slide into the Hell Tank's freaking shock grenades. It kills me a little inside every time I do it.