You know, as a kid I thought it was just there. I didn't really think that much of the show except the animations sometimes were really weird or gross sometimes, but otherwise I thought it was a short, entertaining although sometimes sad show. It was just there for the most part. Looking back now there were a lot of really disturbing things. There were serial killers. There were hunters who hunt humans. They had a brilliant idea in mixing and messing with animation styles to make something look out of place and creepy. I am surprised that it survived back then, considering now some of the stuff seems kind of shocking for on a cartoon only network, but at the same time it kind of makes me want to go back and re-read some of this stuff.
I remember a few shows in particular. One was a creepy show where King Ramses came back, just because the animated Egyptian king was rather scary, as were the third plague with the locus. I remember this one where it was a female that lived in the water, and she kept trying to lure Eustace and then tried to eat him. There was one where this man had became a living building, asking for auditions in order to gain wealth, and to see the body parts scattered about was creepy. I also felt really sad when the one with the alligator marionette controller turned Courage's family into puppets, and then Courage controlled the puppets in order to keep the illusion of them being alive. Those are ones I remember because there was just something about them I thought really creepy.
My favorite part though had to be the one where Courage was making macaroni and cheese for a kid version of Muriel, and she keeps telling him "More macaroni, more cheese" only to throw the creation in his face later claiming "I don't like macaroni and cheese."
When it comes to kids today, I think they would like it, although as I think about it older kids might get more out of it. I think Adventure Time exists and it has wacky stories that are a little nonsensical, but follows a vague story line with odd animation. Courage the Cowardly Dog could easily be considered on par if not better than Adventure Time. I think it would succeed very well.