What Zarathustra describes is the main reason i would say.
Vallaki and Barovia was quite for a long time the server. Thereafter other domains got added, slowly but surely around 1-2 years a new domain or place gets opened up, just think on portalucine, Harakir, kroffburg, or in the recent the Wachter lands.
That time the town was likely more populated as of having monsters under it, and above it at night, and likely was much more used. (Also that time aquiring certain items was even much more harder.)
The problem is i think with redesigning the Vallaki area is, that you can actually well think on it as a server center. From Vallaki to the north, west, east and south at least 5 maps reach out to each direction. So when you suddenly reduce the town to its 1/3 or half ,you have to figure out what to place there instead. Also you need to take into account, that there should be a docks part too.
What i could imagine though is that basicly the slums, and the district north of it stays, while the docks district may stay or gets the town buildings walls removed, and with a slight redesign.
However this would still make the two remaining ones needed to be redesigned, also the three now unoccupied maps would need to get some...purpose as well.
(I would vote on forest or the extension of the easter farmlands)
So i think to code and design a new vallaki would require as much time as making a new domain. Also all the NPC-s that are there need to be either remade/reprogrammed, needed to see if they are needed etc.