It's a plausible idea, Pokemon has stagnated, it needs revival big-style if it is to branch out to different audiences - I'm thinking something along the lines of the reboot of Batman in 'Batman Begins', and 'The Dark Knight'.
I would personally slap anyone who says it can't be done with CGI, and then ask them why not.
We've brought dragons, trolls, and elves to life in Harry Potter.
We've brought trees and what-not to life in Lord of the Rings.
We've created the likes of superhumans in X-Men who can alter their bodies, and project fire, ice etc.
And we've created an entire galaxy of aliens in the countless science-fiction films in the past 5 decades of film.
Not to mention we've also brought transforming robots to life in film (albeit Michael Bay ruined that franchise completely).
The trailer for Pokemon Apokalypse would set a good scene for a live-action Pokemon movie set on a parallel Earth.
I bet Hollywood has had the idea of a live-action Pokemon movie since the Transformers one, but they probably just needed someone else to come up with a decent storyline for them. You'd need a brilliant director for a film of this scale e.g. Steven Spielberg, and probably that dude who made the new Batmans a success as his co-Director.
It could be epic if they got the script right, CGI can easily do anything nowadays - just look at Avatar, and then tell me it can't be done lol.