It's not a bad thing at all! At least from a story perspective. In fact, it's VERY good.
From a narrative perspective... ehh... Well, it'd eliminate about 2/3 of all the conflict of canon. With Toki replacing Medea, no one tryin to suck up the town's energy. With Raoh replacing Medusa, no one's blood is getting sucked(and was that the remains of Shinji's face splattered against the wall back there?). Plus, Toki's insane healing-fu would render Zouken a hilariously easy enemy to deal with, and Sakura could be cure with a flick of his Jesus-esque wrists. Not to mention, with the world , ya know, not having experienced nuclear Armageddon, I see little reason why Raoh'd covet the Grail. More than anything, I think he'd just want to show up his brothers.
On the other hand, I bet Lancer and Raoh would get along swimmingly... And if a certain priest is taken care of, I think Lancer would follow him at the drop of a hat. And with teh three lady-Servants being replaced, I don't think Gilly would have the opportunity to use the WOMEN AND CHILDREN line--and I do love denying that goldie what he likes.