I wouldn't say that the market isn't there. The park is less than an hour from Grand Rapids, and the entire west coast of Michigan's Lower Peninsula is lined with resort towns and beaches. Families from Southeast Michigan head across the state for a weekend getaway throughout the summer, and Chicagoans tend to travel around the bottom of Lake Michigan to relax on the coast's southern beaches. The market is certainly there.
Michigan's Adventure's problem is that there's too much to do in the area. Beach days, boating, fishing, kayaking, off-roading, camping, bar crawling, museums, art fairs...it's a tall order to ask people to cut the time spent on their other activities in half to go to an amusement park where their biggest draw is a 20 year old wooden coaster.
Now yes, they most certainly could use a significant investment to draw more people in, but there are some pretty big road blocks to that. As Poke mentioned, the park is nowhere near profitable enough to warrant that. I've heard that the city council is not very enthusiastic about amusement parks for various reasons, and thus the park has difficulty getting new projects approved. Finally, I've heard that the park receives plenty of noise complaints from nearby residences and campgrounds, which further muddies any plans for the park to expand.
Tl;dr, they're caught between a rock and a hard place, and won't be receiving any significant investment any time in the foreseeable future.