Jeff,
That's an interesting question. I have been thru St. George several times and made my way over to the Kanab area twice.
As I see it, the Pros are:
1) St. George is relatively close with a large retiree demographic with a fair amount of discretionary funds, who may be interested in a getaway that isn't too far away.
2) Zion National Park, and Bryce Canyon are relatively close and no doubt attract visitors from all over the world. The popular part of the Grand Canyon is the South Rim, so probably not many going to come up from the south as its a long, remote drive to get there. (I drove it once in about 3.5 hours and once was enough)
3) There are other smaller state parks and open lands to explore much closer to Kanab.
However the Cons:
1) It is still pretty damn remote.
2) You don't want to be anywhere near the place for half the year due to hot temps.
3) There are other resorts in the immediate St. George area in addition to open land for ATV'ing, etc.
4) Perhaps most importantly that entire part of Utah was settled by people who wanted to be left the hell alone, and from my experience in small Utah towns, most of the locals are generally wary of outsiders as a rule.
Overall, I'd give it a Plausible rating on the Mythbusters scale, even if unlikely.