If you can, yes rip it out, its a dated style.

Post a floor plan with dimensions and you will get tons of help. Generally a one level rectangular island will give you more useable counter space. This will however mean changing/ repairing the floors

Definitely change it - it never should have been built that way to begin with.

I would take it out but not extend the lower level. If the upper level now interrupts the traffic flow then a larger surface extending the same amount of space will still interrupt the traffic flow, AND visually interrupt the space more.

Post some dimensions and a floor plan? I think you would be happier with a simple rectangular floor plan with the right overhang and appropriate seating.

If I removed the two islands I have currently in the space and it was completely blank, I have an 11x13 area to put a rectanglular island. I have cabinets along the walls. Here is a brief sketch with the islands taken out. I have plenty of space for seating and a decent island without having to go into the hallway area like it has now. My island needs to accomodate the gas stove.

Rip off the overhang, pull the corbels, reprofile and polish the edge, making a wall cap. Space and money saved.