I agree that Taiwan needs new planes, and this unfortunate incident might just be the thing that allows the F-16 C/Ds to be sold to Taiwan. But considering that other countries in the world still use F-5s, they aren't totally obsolete. Let's wait until the officials from the MND give more details about the crash. Let's hope the pilots come back alive first.
The difference is most of those countries still using F-5 are 3rd and 2nd world countries and not in Taiwan's 'unique' situation, or at the very least have had some sort of upgrade program to make them somewhat more useful (F-5 2000, F-5S. F-5T), the ROCAF's F-5s haven't undergone any significant refurbishment since they were acquired really. I was afraid that maintaining those F-5s for this long would lead to such a tragedy.
With current budget constraints, to change to an all volunteer force and to buy the $6.5 Billion arms package and the P-3C Orions and the Stinger missiles just released and money allocation for F-16 C/Ds. Its simply not feasible. Maybe in the future, but not now. The government also has to deal with other problems such as the economy which is now number 1 priority. Perhaps when the economies begin to recover, then they'll think about it. But given that starting a new production line takes too long, F-16 C/Ds are a faster and cheaper solution in the short term.