I think it depends how "fog" can be utilized in the ride, but if it takes away from the enjoyment of the ride then that's a problem. I think there are other issues with the ride that should be addressed other than fog but that's my opinion (like the audio track).
"Up" is a relative concept. It has no intrinsic value.
...and another issue with fog on the ride floor is that it can wreak havoc with guests who have respiratory issues of any kind. I don't think we need to baby everyone, but speaking as someone with asthma who has had to stay away from Pirates since they added more fog last year, I'd hate to have to cross more rides off my list.
I'd think that Disney's Imagineers could go well beyond fog in the Mansion and come up with some very spooky and cool effects with light and shadow and other devices. Every silly neighborhood Halloween attraction has fog; I'd expect more from Disney.
Outdoor fog, ie, around the castle, would be really cool, but I'd wonder how it would affect the ducks and other animals who live there. If it were just water mist it would probably dissolve quickly in the air; if it were chemical fog it could be hazardous to both guests and animals.
Fog (atomized water) is usually used only around water or in short effects since it makes a mess when it condensates on floors and equipment. Smoke was discontinued years ago when the AQMD required hepa filters on the ventilation.
They already have a fog effect in the mansion. It uses scrim that is lit up slightly. Utilizing misters like POTC would cause water damage to the set. The fog juice, used in fog machines, sprays heated mineral oil, which coats everything after a period of time. Using foggers outside would work right because you have nothing to really contain it.