i think they should replace MED,not upgrading MED or make anew one,but like other professional Engines,maybe a plugin for 3dsmax_maya_softimage_etc..
to export the model directly from these tools,this is better than making your models in third_pary tools then import them to MED to find yourself fighting it to make things right,f.i:bones-animation-some times textures.
and i am pretty sure that almost no one is using MED to design,but only to export models to (*.mdl)"well,at least not serious user's".