Universal Orlando only has a few expansion plots, and none of them are near Hogsmeade. So scrapping Dragon Challenge was really the only option here.
Universal doesn't always tear down and replace rides. Forbidden Journey and Skull Island were built on expansion pads. I think there's still one for Seuss, and the backstage area behind Men in Black and Simpsons could possibly be repurposed as expansion land (though it would throw a wrench in HHN and stuff like storing parade floats).
Not in Orlando, anyway. In Hollywood, The Mummy replaced E.T., Wizarding World replaced Nickelodeon Splash Zone, that walkthrough attraction was replaced by The Mummy, which was replaced by Van Helsing, which was replaced by House of Horrors, which was replaced by a store and The Walking Dead. Wizarding World replaced Nickelodeon Splash Zone, Transformers replaced Backdraft, Despicable Me replaced Terminator, Simpsons replaced BttF and everything in that general area, etc.
I'd be down for them moving Dueling Dragons to Hollywood to replace Hippogryph. That thing's not great. More of a rollercoaster for kids.
Disney doesn't do coasters in the traditional sense. Uni should sell it to Cedar Fair or Six Flags or someone similar, though. (Busch?)
A very well designed ride. But probably one of those scenarios where it's most valuable if nobody has it.
Disney has a few. California Screamin', Rockin Rollercoaster, Big Thunder Mountain, Matterhorn, Space Mountain and Expedition Everest.