I wouldn't usually quote Wikipedia but in this case it works, and I know it to be accurate: "Opened on February 11, 1968, [Madison Square Garden] is now the oldest active major sporting facility in the New York metropolitan area. It is the oldest arena in the National Hockey League and the second-oldest arena in the National Basketball Association." Yes, the Dolans just poured a bucket of money into renovations. However, just like the mid-1970's Yankee Stadium renovations, they can't really change the fact that the place is outmoded-- and I'm speaking as a Rangers fan who has attended plenty of games there, most recently in April of this year.
My guess is that in 10 years, MSG will have relocated to a new building for the 5th time in its history-- likely a shiny new arena to be constructed as part of the 12.7 million square feet of new retail, office & residential space going up in the Hudson Yards development on top of the West Side Yards. If nothing else, the competitive pressure from the Barclay's Center (which just passed MSG as the top-grossing concert venue in the US, according to Billboard magazine) would be pushing them, regardless of the City lease.
I wouldn't look for Penn Plaza to be demolished, though. That office space is too valuable. If anything, I'd expect to see another Penn Plaza-sized office building go up on the site. However, whatever they put up, I think you've got a lot of major Manhattan players, both political and real estate, that want to make sure that the station itself stands up to comparison to the best European stations.