Personally, I think the best way to have booked it would have been for it never to have happened, Kane was always so much better with the mask. I also think the way they did it sucked big time, it was typical at that time that it had to be HHH who was able to unmask him.
However, if I was able to book it, and the mask had to go, I would have done it in the build up to WM XX after Kane helped Vince McMahon bury Undertaker, (killing off his biker persona). I would have had them carry out that storyline as they did with Taker playing his mind games. Then at WM, Taker wins and leaves the ring, Paul Bearer and the druids go to the ring and rip the mask off an 'unconcious' Kane. Kane then sits up and starts tearing through the druids, but PB is able to get the mask to Taker and they leave together.
Then the next night on Raw Taker and PB are in the ring with Kane's mask and Taker says something to the effect of 'You didn't like what I had allowed myself to become, and you knew the monster within myself had to be unleashed again and you did what you had to to make it happen. Now I've done the same to you. Join forces with us and as a family we can dominate WWE'.
Instead Kane comes out and destroys Taker, leading to a fued for a few months where Kane eventually comes out on top after proving to be just as evil and demonic as when he first made his debut.