Take this literally. Do you think he should reprise the role, as Ian McKellen is with Gandalf? Christopher Lee has expressed discomfort with flying to New Zealand at his age, but on the other hand, he was underused in the Lord of the Rings trilogy, where scenes with Saruman were cut for the films' fluidity.
As for me, I would like to see him reprise the role. However, I do not know his exact situation, and therefore do not know what is best for him. I do know, however, that I could not bear to see Saruman played by another (and apparently The Hobbit's director agrees, that he would actually omit Saruman from the films if Christopher Lee did not reprise the role). I also feel as though the regretful harm done to Christopher Lee by downplaying Saruman's role in the LOTR trilogy would be absolved and healed somewhat if he were given a chance to play him in The Hobbit. So, I think that he should reprise the role.