Absolutely. Look at how abysmal the classic alts for season one were, now imagine those being the main designs of the cast. I wouldn't have been able to play it, visual appeal is very important to me along with gameplay. I would have never even bought the game had we gotten those designs.
Well , no one would have touched the game if the standard for characters were SaberRat! But I'm really impressed with the overall visual identity DH set into the game. Things like Thunder's stage weather transitions and the murky feel of Spinals stage actually rank among some of the best 3D stages in fighters for me, and Glacius' crystalline appearance in certain colors, or even Fulgore's mechanical quakes are pretty well-realized stuff. Considering most western 3D graphic fighters NEVER seem to get this right (and I still cringe at pre-MKX Netherrelm stuff from time to time), I'm surprised how much they got right on their first go at it.
So much so I think they make their "bad" aspects look even worse by comparison. It's a wide range of quality, rather than a tighter one where everything just meshes into an "overall meh".
IG is doing a good job keeping up with this, and eliminating some of the obvious mis-steps soundly as they progress. Which is ALSO impressive for a developer brought onto an already-running project.
But SF characters are iconic and well designed. (Most are). For a comeback game like SF4 they shouldn't have touched their appearances. Maybe some minor changes can be done for SF5. KI NEEDED to update the designs its not comparable.
They're Iconic, sure, but sticking to them and simply updating model and texture detail is insanely safe. I hate that the characters of the series don't grow with me, they just leave appealing to my shifting age demo up to the occasional new characters. "Want a Shoto that's achieved mastery level, like Ryu should have by now? Lets not update Ryu, let's inexplicably revive GOKEN!" .....
I'd love to get a change to connect to the characters I loved as an Elementary / Middles schooler in a way that respects the fact I'm well into adulthood now.
While I agree KI works better with updated designs, this doesn't at all mean the company had to have the stones to actually DO it. Fighter fans are some of the most resistant to character changes out there, and most companies are happy to accommodate this fear.
Characters are the stars of fighters. One of the most effective tools to developing a character it to show how outside stimuli changes their mannerisms and development. Yet most fighter characters default to existing in a vacuum... and there's no reason for them to! Models and animation can change in look while maintaining the same damage, hitbox, and startup / recovery data! Voice actors can give new lines and show pain or stress in an attack without the character actually having to weaken due to the changes!
Already long story shorter, I rather like the way KI's accessories, alt character models, and updated designs push some of these ideas forward. I think most of them are a bit better than what Tekken gave us at it's worse, and best or at least on par with the best Tekken, Virtua Fighter, and Soul Calibur have offered over the years.
I agree but sometimes the re-designs in later games ends up looking really terrible (like Reptile post MK3) which is why digital codes for the original skins for MK characters were going for like $100 on eBay when MK 2011 came out. Sometimes you just can't mess with perfection.
Which is why it's great DH not only mixed in their own ideas, but fairly swiftly assured that they'd pay (more or less) proper respect to the old designs as well. I can understand why 2D fighters never did this (Though KoF XIII even does a good job at it in 2D!), but it should be standard to never scrap the old designs in 3D fighters.
tl;dr: New Designs? Old Designs?
I expected Snake/Dino Riptor to be the design, having to be more influenced by what it was originally. 
