I'm not sure. With graphics progressing as quickly as they are (click here (
http://thrik.dodnetwork.com/gobble/ue32.jpg) for an ingame shot of the next Unreal Engine) I wouldn't be surprised if the prerendered backgrounds of Grim Fandango could be created in full 3D without any detail loss at all, in a few years of development. I'm not saying that this would mean that the camera should be fully movable like in an FPS or something, but it could pan beautifully around (ala Broken Sword 3).
The character models themselves though could definitely use improvement. Whilst the overall style is great, the polygon number is noticably low to allow for the game to run on all systems in 1998. If the arms and such were smoothed off well to suit a modern audience then it'd look fine. Assuming that the 3D artists with the same vision were creating them, they could pull it off well.