"Could Alton Towers overhaul Nemesis?". Yeah, it's definitely in the realm of possibility. The ride is one of B&M's oldest, and has seen a lot of operating hours. We don't know how long B&Ms should be lasting before they get some extra work. And with technology having advanced so much in the past 26 years, I'm sure there's some non-essential stuff that could be done to improve how it runs and such, if Towers/Merlin wanted to spend the money.
With Gardaland retracking Shaman, it's not the most ludicrous thing to suggest even these days. If 6 months ago you were told 'Merlin are going to spend money overhauling Nemesis or Shaman', you'd 100% expect that Nemesis would be the more likely option.
As others have said, the Nemesis pit is designed specifically for Nemesis. What could go in there as a replacement of Nemesis? I'm sure something could be figured out, but it would be expensive and difficult. Especially to replace a ride which is still well received. Even doing a major retrack of Nemesis will be difficult logistically though.
With regards to 'is it popular with the general population?' type questions. Yes, it is. Just because a ride doesn't have a long queue, doesn't mean it isn't popular. As others have said, it has a high throughput, so will naturally have a shorter queue if the same number of people are queueing for a ride with a lower throughput. But even then, at peak times, it can still gain queues of up to 90 minutes. That means people are happy to wait 90 minutes to experience it, just as they're happy to wait that long for the likes of Smiler, Wicker Man, etc. It just happens that it doesn't happen much!
So yeah, I could see something happening to Nemesis at some point. An absolute "overhaul" / retracking? Maybe not. Some extending work and extra money spent to help improve the longevity of the ride system, along with them milking the Nemesis brand a bit? Yeah.