While bringing older character won't necessarily increase quality right away, it would soil groundwork for more continuity based anime, more coherent and eventful story providing connections to past regions Ash traveled through and give new viewers insight to better understand history.
As well create plot/entanglement with stable cast which can be expanded and build upon getting transferred to next regions, due to foundations being already made during their first run.
Which would allow target demographic to get know better such character bringing benefit of attracting more of older audience back to this show through word of mouth and hype such twists make, which eventually generates bigger number of viewers and as final result more money.
Considering how previous characters which has solid groundwork and ironed out to extent their story already know main protagonist Ash from before with form of friendship, connection being already established in past creating environment for interactions and their growth to actually be more profound/different than we see with new characters which join cast with flashbacks and references to past becoming stronger. Due to strong connections they have with anime history and past regions making plot more driven like we follow in other anime.
With older companions you can have them go on bigger, better things, you can have friendship between protagonists grow stronger since they already share history together, introduce more complex obstacles to overcome and have better on going story which gradually grows over course of series. As opposite to basic, going from zero overused concept we got used to follow with novice companions.
Such as continuation of Dawn contest journey, Misty advancing her goal of becoming water master building up on water team which left lot more to be desired, Max starting out journey getting starter etc? And ill readily admit how i miss some of this characters like Misty and her multisided personality bringing lot of comedy, fierce clash and sarcastic inputs which could lift chemistry to be more spicy and endearing with her around imo.
For once i think it would be infinitely more interesting for change to receive continuation of already established and experienced companion going through more substantial growth being refreshing breath of fresh air from usual formula we got used to. Of constantly bringing new companions which go through basic, formulaic growth leaving unfinished with lot of potential ending wasted.
New characters are sometimes needed to bring breath of fresh air in show, but sometimes revival of older companion can bring new life to main series and provide something new, and turbulent to structure of anime through build up on established story of fan favorite allowing us to see him taken in new, exciting directions. Something new characters can't provide setting ground for better glued storytelling.
Which as result means more stable cast, filled with continuity storyline and on going compact plot strengthening its connections to past making for better written and engaging anime.
p.s. No pun intended but pokemon anime definitely had higher quality when Misty or May persay were in main cast compared to mess we have now in BW. Of course that doesn't mean it was because of characters only, but looking back their stories and personalities did added more seasoning and more compact story so to speak.
Lastly using Dawn cameo as indication of anything is really, really weak reasoning considering how it was pretty much known from start how bringing coordinator in region without contests doesn't exactly allow to do anything with his/her story.
I say give new characters their part, while also keep older characters relevant doing continuation of their story.
Return of someone shouldn't be determined through number of episodes he was put in, but in how relevant he would be to current story and if his return would help to advance it forward or not.
Phrase "they had their time" doesn't mean it would be mistake to "extend such time" developing them more, and its always fresh and nice to see all time favorite return getting update going through new directions. Which would make fans become more loyal toward show respecting such gestures.
Its real waste to drop potential they have to do more, instead of utilizing it in productive manner for their stories.
Also reason why characters never develop to full potential is not surprising in show like pokemon which so often and fast replace companions. No one stays long enough to reach his apex, and when adding into that other factors like writers inexperience especially in earlier sagas when they still learned or plots surrounding character suffering from other problems not having enough substance to go much forward like Max due to being too young to have pokemon its no surprise why no one was used as much as it could have been possible.
Likewise there is no reason to believe how writers would bring back older character and make him main companion again just to have him stand in background not doing anything. Just like any new character which is introduced captures people interest feeling fresh, after long absence that same effect could create previous companion when given continuation of his story.
I believe writers having more than enough time on their hands regarding long time gone characters to learn on mistakes. To be more precise years.
As far as characterization goes that's not problem either . Misty was always interesting full of life character to me and she was highly enjoyable in chronicles and cameos producing great interactions with Daisy, Tracey, Ash or Max. So did May when coming in DP having great interacting with Dawn, Ash, heck even Brock to some smaller extent. Both characters actually lifted up chemistry and dynamic there to more enjoyable level proving how writers know how to write such characters in enjoyable and worthwhile manner.
If your going to bring back previous companion for longer return and not just small appearance, its in writers interest to provide plausible way behind his comeback and put effort into his story which prompted return to perceive him memorable and appealing to not only older but new generation of viewers as well. Since whole purpose behind his/her revival is to provide some unexpected twist and change from usual pattern to bring something fresh and unpredictable to fans.
After all for example isn't that whole point behind Charizard return now?