Fairy tales can still be magical even if they are rewritten for a modern audience. Making them more modern does not necessarily mean excluding magical elements of the stories. Traditional fairy tales have similar characters over and over which limits a child's imagination. By creating more diverse characters, this can open up more creative possibilities for children to imagine.
While magical elements are important parts of sparking creativity in children, it should not be the only focus. Modern fairy tales should evoke more imaginative possibilities beyond the fictional components of the fairy tales. In recreating traditional fairy tales, children will have more inspiration to write their own stories, not less.