Would it be feasible to upgrade ITER into a much more powerful plant with the new magnets, or are they basically spending another 15 years building a huge thing that is already obsolete?
ITER is not obsolete even if better magnet designs are now possible. It's an incredibly huge and complex project with many critical details. It's literally spawned 10's of thousands of research papers. It's a pathfinding project with far more value than just this one aspect.
It's probably not feasible to upgrade it but apart from the magnets a lot of problems being solved for ITER (especially materials, tritium handling, and remote operations) will be useful for any Tokamak and indeed for any magnetic confinement fusion device.
