Dollywood is in an area that is growing rapidly with tourism, and simply has a much bigger market and stiffer competition to deal with. It makes sense for them to be investing heavily in the park right now. As for SDC, Branson isn't looking so hot anymore, and that might not change for awhile. As swoosh said, it's not a competition between the parks, the company just doesn't want to flush its money away.
If this project is indeed a coaster, I'm a little torn on what I want it to be. I really enjoyed the MM concept because it put a major looping coaster into a small, heavily themed package that really fit the HFEC feel. I hope they don't go and try to change the skyline of the park with this one. I would love to see them pick up a terrain B&M of any sort. DW could use a reliable, high capacity thrill ride.