Why not both a remaster and a remake? If we look at something like Final Fantasy VII, both the original and the remake can live side by side on the same store.
Final Fantasy VII: Remake is the template for a quality high budget remake IMO, but it is probably outside of the budget that a Saga remake would ever get. Saga has the benefit of being a shorter story at least, so it would be less likely to be stretched into multiple instalments.
A remaster has the benefit of preserving what is there and allowing a new audience to experience the game without forking out thousands for a used copy. The artists who created Panzer Dragoon Saga deserve to have more people appreciate their masterpiece. With a remake there’s more chance that the original vision will be changed for the worse. Having something close to the original but in a higher resolution provides a nice comparison point even if the remake turns out to be respectful of the source material.