This is an inspiration photo.

If your masonite siding has water incursion, then think about replacing it. However, your siding may be in great shape. It will be a function of your climate/land, the quality of the siding on your house, house maintenance (paint protects against water incursion), and architectural features like deep eaves that keep water off the siding (you appear to have fairly deep eaves) and how far the bottom of the siding is from the ground (yours seems to be pretty far off).

Replacing siding in good shape is expensive. If your siding is fine, you're much better off saving the money you'd spend on replacing the siding and, if you need to replace it in the future, investing in something better than vinyl. If you have some water incursion around your dormers (the only place I see with shallow eaves), I might just replace the damaged siding.

I don't think the blue of your inspo pic will go well with the brown of your roof. The roof is darker and browner than the shingles on that pic. I'd pick a warm green with cream trim.

A color similar to the green in this pic:

Ocean Course · More Info

I love sage type color with natural shingles and I agree if the sidnf is in good shape I would not trade it for cheap vinyl.Your inspo pic shows very nice natural shingle siding with the blue . I personally am not fond of blue siding except near the coast. Can the shingles be brought back to natural or are they already painted ? Remove the shutters on the porch window and IMO the roof over the bumpout should match the rest of the roof .