I don't see how people in SoCal can't appreciate outdoor family attractions like Dinosaurs Alive. Especially families with children (because kids love dinosaurs). Dinosaurs has done exceptionally well at the other CF parks, otherwise CF would've just kept it at KI. Plus it would be not only a suitable replacement for the old KOD attraction, but it would bring some extra revenue into the park.
Space-wise, if Grona Lund and Indiana Beach can squeeze coasters into their parks, Knotts can do it too. Doesn't matter how big the park is. All that really matters is whether the park is willing to make room for other rides. Everyone said Cedar Point didn't have enough room for a new coaster and then they got Gatekeeper.
Well I went to Knotts just the other day to ask why KOD was closed down. One of the ride operators that were inside of the aracde, where the exit of the ride used to be, and they told me that no one was going on. I asked why but the logical answer he could give me was, "Not alot of people are interested in going back in time to the dinosaur days i guess." As far as bringing it back, I wish they did bring back the KOD attraction. I loved this ride growing up and i'm trying to find a spot in the exit/enterance queue to sneak in and take pictures and hopefully put them on TPR.
Plain and simple: Knotts doesn't think outside of the park sad to say. Big fan of the park, just too.... cramped together.