Liu hated it? Ok. It seems you only hang around people who share the same view as you. Most of the people I've conversed with who know about Betsy's back story don't really care cuz they know it's a comic book.
The Ghost in the Shell is a bad example since in Masamune Shirow's original work the Major's body is generic model which doesn't resemble her original which helped hide her identity.
Who are these people who want Kwannon back? Is this a case of Marvel bending over to the minority again? Why should they change Betsy's iconic look and put her through more trauma just to please the mildly offended and some white woman fetishists.
Betsy's transformation into an Asian exterior was the work of a man of Asian descent which you failed to mention. The co-conspirator, Mr. Claremont, said that the only response they got was that people liked the art.
Kwannon was never given the chance to succeed or fail? I guess you weren't reading the books back then. She was an Asian character created by a white dude to clean up some imaginary mess and she went away cuz she failed to catch on.