Here are my questions:
1. Open up the wall where the fridge and range are? This is the wall where the living/bed room is. I could add a breakfast bar. This would mean that all the wall cabinet space is gone and the wall space in the living/bedroom area.

2. Alternatively, leave the kitchen layout but update with new cabinets, lighting, etc.

3. The third version would be a to cut a "window", which I find a bit strange.

Below some examples of what others have done in the building:

On the other hand, most people seem to want an open concept these days.

My suggestions would be to update or paint the cabinets. White cabinets would bring a lot more light into the space and make it seem less dark and dreary.

I think all those "windows" have been cut to allow the person in the kitchen to interact with people in the living space. But I'm puzzled as to how often people in studios invite large numbers of people over? When I lived in a studio, I could entertain 3 or 4 people, tops.

What I'd do to open the kitchen up a bit more to the living space is to remove the wall with the doorway into the kitchen. You could still have all the cabinets, although you might need to get a cabinet with a finished side on it for the ends.

I'd rather have a full wall where others have cut the "window." A complete wall gives you a lot more options for furniture placement.

Is the openness worth the expense and the potential drawbacks?

The cabinets look fine, maybe change out the hardware.

As a landlord, I would stop there. Or at most mount a low profile microwave under one of the cabinets.

If I lived there, I would remove the gas stove, replace with a combo microwave-over-oven and a separate induction cooktop.

I've read your post on the Kitchens forum, so I have a better idea where you are coming from.

For what it's worth, here are some more thoughts.

I would not break through the wall into the living space at all. Once you put a window or pass-through there, you are defining the space on the other side of the wall.

With the whole wall there, someone could put the head of their bed against that wall, and place a bookcase or other type of room divider parallel to the bed, creating a little, cozy, semi-hidden nook for their bed. Put a window there--it would feel really weird having your kitchen open onto your bed.

And the height of the windows you have shown is awkward--the cook would have to bend down to see anything in the living space.

I'd take my money and concentrate on "blinging out" the existing kitchen. Not knowing your area, it's hard to say where to spend the money.

Definitely change out the "boob" light on the ceiling. Add some undercabinet lighting if you can.

If the cabinets and granite are in as good shape as they look in the picture, and if stainless is what the renters in your area are looking for, then concentrate on getting stainless appliances.

If the cabinets themselves are in good shape, but you want to lighten up the kitchen, then look into just refacing the cabinets with lighter colored doors.

I would not give up an inch of storage space. Unless there is additional storage elsewhere in the building, like a basement lock-up, every bit of a renter's life must be contained in their apartment. Sports gear, clothing for multiple seasons, holiday decorations, the childhood teddy bear, books, CDs, DVDs, shoes--everything has to fit in that apartment.

I've known people who didn't cook much who stored CDs or bicycle parts or clothes in their kitchen cabinets.

There will always be renters who walk in and say, "We want open concept." But there will also be renters who walk in and say, "Look at all the storage!" You need to pick one group and market towards them.

And in the other thread you mentioned fitting out one of the closets as a pantry. I'd suggest not doing that. Let your renters fit out the closets to work for them. Unless they are gourmet cooks, there should be enough space in the existing kitchen for most food storage. A dedicated pantry won't attract the average 20-something who eats out twice a day. They will only wonder how they can make the pantry work for them, instead of seeing it as a bonus.