According to the most recent approved permit for the Magic Kingdom East Side Modifications, the Main Street Theater is no longer included as part of the construction. Originally, the permits were filed with MK1 being the Magic Kingdom Theater and MK2 designated as the Tron Lightcycle Power Run attraction. The revised permits that just received approval today, only include the Tron Lightcycle Power run attraction in their project limits and no longer include MK1, the Magic Kingdom Theater.
This is not to say that the Magic Kingdom Theater could come at another point but for now it looks to be on hold or cancelled completely. We have not received official word from Disney regarding the status yet.
News & Plan Source: South Florida Water Management District
Concept Art Source: Disney Parks Blog