THBS makes sense for them - they don't have a spinning coaster in their lineup, costs less to design/theme/build (being that they have it in a number of their other parks already), and is a popular attraction at their other parks (from what I have seen).
UPDATE: If it's not a THBS then maybe this track sighting could have something to do with it. http://www.screamscape.com/html/industry_news.htm#Mack
The best family coaster I have ever ridden is Powder Keg at Silver Dollar City. The ride was originally constructed as Buzz Saw Falls by Premier Rides, but Herschend worked with S&S Power to radically redesign the experience. A zero to 50 mph launch element was added as were some very exciting 90 degree twists and turns, yet the designers maintained a family-friendly 42" height requirement. Thrilling for all ages, Powder Keg is one of my top ten coasters of all time, and is suitable for thrill seekers of almost all (reasonable) ages. I would love to see more amusement companies add original family coasters like Powder Keg into the mix.
And yes, Powder Keg is quite thrilling. I didn't say it was a kiddie coaster. ;)
I think a longer, slightly taller version of Vekoma Junior, in the right setting, could serve as an engaging family coaster.
As for Grandpa Fred, Anonymous Poster 18.104.22.168, I would venture to state that there are very few coasters of any sort that he should be riding - period! Although I would have more trust in Powder Keg's smoothness over a junior coaster's cramped seats and herky-jerky turns any day.
So I want it to be fast and twisting, but with no really big drops, and a height limit no more than 40". I don't want it to have any dark tunnels, but well-lit tunnels are fine, and any kind of scenery would be great.
Since this won't be a "kiddie" coaster, it needs to be a fairly long ride. Aim for between 2-3 minutes in duration. Multiple lift hills are okay.
And if you really want to put some effort into your engineering - plan to advise parents to always seat kids on one specific side of the train. Then make sure that on all the steep turns, the forces make the kid squish the parent, not the other way around.