Although it is a rather weird adaptation of the original Silent Hill game, it absolutely should be re-released in some way.
All Konami really gotta do on their part is hand over the rom/build to 8-4 Ltd and let them officially localize it in English. After that, they could either dump the game on Nintendo Switch Online (in the same vein as Castlevania Legends) or include it as a bonus extra in a brand-new re-release/port of Silent Hill 1, sort like what they did when it came to including Metal Gear 1&2, Special Missions, and VR Missions in the Master Collection release of Metal Gear Solid 1.
Regardless, this game is a part of Silent Hill's history and absolutely SHOULD NOT be forgotten.