The development of a holy place will always have its pros and cons. Just look at Shangri-la in China! It used to be called Zhongdian. The famous Ganden Sumtseling Monastry (Songzanlin monastery) is located there in the capital city of Jiantang (Gyalthang in Tibetan). It is the largest and most important Tibetan Buddhist monastery in Shangri-la county. It was built by the Fifth Dalai Lama, Ngawang Lobsang Gyatso, who apparently had visionary plans to develop the monastery. The local Tibetans refer to the place as "Xiangelila" which is derived from Shambhala! During the Cultural Revolution, the monastery was destroyed and was rebuilt by the Chinese Government only in 1983.
The place was made famous by the author James Hilton in his novel "The Lost Horizon" published in 1933. Since then Western seekers have been going there looking for peace and harmony. Due to the popularity of the place and to encourage tourism, the Chinese authorities renamed Jiantang as Shangri-la in 2001 and developed the monastery and the area around it. Now Shangri-la is a modern town and thousands visit the monastery everyday, bringing in lots of tourist money.
The advantage of developing a holy site like Lumbini is that it brings prosperity to the people in the area. Hotels will be built to accommodate the tourists, etc. etc. I've seen photos taken of the Ganden Sumtseling monastery and surrounding tourist sites. One photographer who posted his photos on a website said that in the monastery, there are always so many people, it is difficult to take a photo without people in it. So he has to wait for the right time and usually had only one or two seconds to take his photos minus the people.
So the disadvantage of a famous holy site is, it becomes more and more commercial. I have a DVD of Shangri-la, a promotional video made by the Chinese Government to promote tourism with lots of beautiful places, beautiful local people dressed in their traditional costumes performing for tourists. China is promoting tourism using spiritualism!
With development, Lumbini will probably become like Shangri-la. In the midst of such popularity, Lumbini must maintain its identity as a spiritual place and not be affected by the materialistic side. But it also needs money to survive. So I guess it's a win-win situation.