I would agree with that it would bring back the "old vibes" of the old days of PokeMMO but I am unsure if it would be a wise idea if I am completely honest. Automated tournaments were mainly created so everybody in the game had access to it, rather than just people that browse the forums. We also generally only had English threads with only specific time zones so many non native English speakers just did not even understand when those tournaments were. It also relieved a lot of stress from staff. From not needing to host/ref the PvP events and create brackets, role call and many more tedious things. I never minded any of it myself but I can definitely say it makes our lives a lot easier and it allowed us to create tournaments at times when we were usually all asleep/at work/at school etc.
Now on the other hand I do think your suggestion has some good aspects to it. I could see it potentially working in this way:
The automated system remains how it is right now with regards of signing up and matching. And I don't think the automated tournaments itself are necessarily the problem here. It is the spectate function. If somehow the spectate function gets improved to let's say; everybody that wants to spectate a match needs to enter a room through the upstairs of the Pokecentre and only through there are you able to spectate all the matches. And while you are in there you are also with everybody else that is spectating. And you can talk in normal chat/some other chat with them. Predicting plays and talking about the matches without necessarily ruining the turns for the people that are battling. It would also somewhat bring back the feeling of being together watching tournaments while not undermining the current system that is in place. It would sort of destroy the freedom of being able to spectate from anywhere. But with how many Pokecentres that are in the entire game I doubt it will be much of a hassle.
But again, this is just an idea I just thought of and it probably has some downsides I will get told by many people. On top of that this is just an idea, not an official thing that might happen in the future. So please do take it with a grain of salt. Just wanted to give my two cents on the situation.
All in all I can safely say that the old ways of hosting tournaments will not return. For standard tournaments at least. Team tournament/niche tournaments still get held in the old style of things.