It's sad either way losing another historic structure in a city that has already lost so much. But on the other hand the Monroe Block project is exactly what so many of us have been hoping and wishing for this site. I've always liked the cross cut with the view of the old Wayne County Building and the preserved facade acting as an entry arch framing makes the view of the old Wayne County Building from that angle into something that will prolly become one of the city's great landmarks.
The theater has been completely stripped on the inside as well so if it were to be saved the interior would have to be reproduced and not to mention the structure would seem out of place in the middle of the development and as was also mentioned would ruin the pedestrian flow.
All and all I think this is a good compromise and a win - win.