Hell yes!! I was a young kid during He-Man's reign in the mid 80's. I had Castle Grayskull, Snake Mountain, tons of vehicles and the majority of the action figures. I was obsessed with the cartoon as well. My dear mother saved all of it and now my 2-year old son plays with it all when we go over there for our Sunday dinners. We brought Hordak home a few weeks ago because he got quite attached to him.
As far as making a fighting game goes, I think this would be the perfect franchise to do it with. Lot's of interesting characters with cool looks, unique abilities, and awesome weapons. They could make some fantastic backgrounds too with all the beautiful locations throughout Eternia. Lot's of storyline material to draw from as well.
An IOS Masters of the Universe side scrolling brawler game came out a few years ago, but I haven't played it. Still it got me thinking about a MOTU fighting game back then. I'd love for it to happen.