Even if there was a designated viewing area, park guests would still clog up the main pathway of Hogsmeade trying to get a decent view elsewhere (unless there was some sort of crowd control). I suppose they could use the Triwizard Spirit Rally stage as more room for guests to watch, but that would mean the stage couldn't be in use for shows after a certain time.
The concept of a nighttime show in the Wizarding World is great in theory, but the land itself clearly isn't made for that.