I don't know of any current plans to redo the hotel, but Disney needs a Disney Branded "Value" hotel. If all they offered was Luxury it would be harder to fill and all the "Value" business would go elsewhere. And to be honest, price wise, Paradise Pier is more on the level of a "Moderate" hotel. If Disney gets all the land, and eliminates its direct competition across the street, you'll see a wider variety of Disney branded hotel offerings.
I just don't see this being something that is going to happen. All those hotels across the street know the intrinsic value of their land, and more importantly, they know their location is fantastic. Better, actually, than Paradise Pier Hotel. For Disney to do a value from scratch, they'd probably have to build up given the lack of space they'd be working with, and that's a mighty expensive proposition to try and fill with cheap hotel rooms to compete with the likes of the HoJo. If it was gonna happen, Walt probably would have done it decades ago. I definitely don't see it or the "need" to do it now.