Honestly, I feel the only place that this can go is Animal Kingdom.
Would it be BETTER to put it into DHS? Maybe. But from what I've been reading all over the place, Animal Kingdom is struggling as it is. Honestly, if I were Disney, I would've waited to see how Avatar 2 does, but I guess they're kinda building around the original and praying to the Disney Gods that Avatar 2 doesn't suck.
Having said that, there isn't a huge demand for Avatar merchandise because, honestly, I haven't SEEN much in the way of Avatar merchandise. I'm fairly certain before they bought up the rights they spoke to whoever was in charge and asked about what kind of merchandise of what they DID put out was popular, and what else MIGHT be worth looking into to make merchandise for.
But frankly, I'm not gonna hold my breath on the Avatar land. Unless they do something ride-like that lets you be an Avatar yourself, I don't see just being part of the environment being as big of a draw as it should be. That's just me, anyway.