Saying that Fripp is in King Crimson is a bit of an understatement. He's the soul of it, there's no KC without Fripp.
I see your point (wouldn't Fripp help any cover?), but I don't necessarily agree that that's the main factor. Yes, no one else could come close to imitating Fripp's soundscapes, but I believe it is possible to do a good cover of it with a more conventional guitar sound. The KC version omits entirely the drone sounds of Eno's synth, but not missing it at all.
What I think helps the cover the most is that Belew really feels the song and his performance is not lacking in character or emotions compared to Bowie. (Yes, I know he's toured with Bowie - right after David poached him from Zappa )
Great news about the new album, but I also worry for it. Hopefully he does himself justice, and I would tell anyone who hasnt really heard much from him to get his older stuff and be ready to be blown away. A proper musical genius.