Taker looks a lot more healthier than he did when he lost against Brock Lesner (Bray Wyatt match). And as much as I would love a Taker/Sting match. Another loss for either of them would be bad for them =/
My concern isn't just based off his appearance or recent matches. Taker has been battling physical ailments and injuries since the late 90's. He has bad knees and limited mobility in one of his shoulders. When you factor in his age and Brock Lesnar's stiff style of working it's only natural to be concerned for Taker's well being. Lesnar gave him a concussion the last time they wrestled. I'm sure he'll be more cautious this time around but I still think Taker's going to get beat up pretty badly in this match.
As for whether a loss would be bad for Taker or Sting. Considering they're both towards the end of their careers I really don't think it would affect either one of them much at all. There's no shame in losing to Sting or The Undertaker and since Taker's streak is over anyway it really doesn't matter who would win in their match.
I didn't like seeing Taker's streak end but it really helped cement Brock as the top guy after his momentum was stunted due to losing to both Cena and HHH. If they had booked Brock as an undefeated monster from the moment he returned in 2012 then there wouldn't have been a need for Lesnar to end the streak. He could have lost to Taker and he still would have been considered a top guy. Unfortunately he needed a gigantic win like the one he had over Taker or else his credibility as champion would have suffered as a result.
Sting's loss to HHH on the other hand served no point whatsoever other than to stroke the egos of HHH and the WWE brass. HHH didn't need the win. You could argue that Sting didn't either but the whole thing just came off as another excuse to make WCW talent seem inferior. HHH did the same thing to Jericho, Booker T and Scott Steiner when they had a ton of momentum going for themselves. If Sting won this year then a match between himself and Taker at the next mania would have seemed even more special than if it were to happen now. Not to say it still wouldn't be special but Vince and HHH's egos continuously get in the way of optimizing their talent and storyline potential.