Didn't Honda get the old engine from a Nighthawk?
No, as I've explained before in other threads relating the issue, the CMX250 engine hailed from the predecessor CM250 which hailed from the CM185 & 200 TwinStar. It was the exact same design evolving with each incarnation (and technically the engine remained the same when it went from CM250 to CMX250, rather the styling evolved away from the disco-cruiser era instead).
So why was it okay to take that engine from another bike,
They didn't. The CB250 Nighthawk debuted in 1991, several years after the Gen-1 Rebel was nixed. The predecessor nameless CB250 motors were considerably different in design. This
could be a parallel issue, however it's not uncommon to resurrect a motor in another line, the single year production 1988 Shadow's engine resurfaced in the 1989-98 PC-800. The major difference being the Rebel eventually returned to the line-up while the 800 Shadow did not.
None of which, by the way, happened with the 300 & 500 models.
but when they do in now, it is terrible, and a travesty?
Because instead of evolving the design they took an engine from a completely different line with a completely different design (CB) and called it something it wasn't (CM). Like I said, they took a Camaro and called it a Chevette. Had they just called it something else, anything else other than what it ISN'T, and there would be no issue. For those that fail to see this logic I can pose a parallel question: why didn't they call it a Magna?
Actually that would have made some sense, after all the Magna was always a street/cruiser that derived from a sport bike.
Okay, the actual parallel questions behind the logic: Why didn't they call it a Shadow? Why didn't they call it a Hawk or Super Hawk? Why didn't they call it a Cub? Why didn't they call it a Dream? Why didn't they call it an Ascot? Why didn't they call it a Gold Wing?
I could go on all day but if I have to explain it any further...(you all know how that old Harley saw goes, right?

)
I feel that bashing the updated model in no way invites our new model riding brethren into the fold.
Please show me where I or anyone else bashed the updated model.
If anything I was bashing the Honda Motor Company.
We need new blood to keep the hobby viable.
New blood was never a problem in the three decades that the 250 was available or the two decades that Rebel forums were on the web.
I seriously feel that a Rebel 300/500 section should be opened up on the forum. This is the "Honda Rebel Forum", not the "CMX250/450" forum.
As mentioned the web owners opened a separate board.
Which actually makes sense if you think about it: since the 300 & 500 have absolutely NOTHING shared with the 250 (or 450) people here have nothing to offer on the matter. I'm not sure why some folks can't see just how different this "same thing" really is.
I want to learn about them. And perhaps someday get one, either as a younger siblings to my girl, or as an upgrade!
I've shared that very sentiment numerous times.
With several caveats, but I have repeatedly expressed the interest nonetheless.