Actually, the inside joke is that the focus of the Disney/MGM Studios changed from "Hollywood" to "Plush Sales" as soon as Pressler took over.
That's the story behind all the 'Villains' ride rumors. Disney is always searching for profitable merchandising lines. Winnie the Pooh is hugely profitably for the company (until the court takes the license away) but their last big "new" line was 'The Lion King'. The Villains line (an offshoot of the
Disneyland 'Fantasmic!' merchandise) turned out to be a rather nice surprise especially with adults. Big, but not huge. Cries went out immediately to exploit and expand its popularity as quickly as possible. WDI, smelling the chance for job-saving projects, leapt at a chance. So out can all the sketch books.
'The Great Movie Ride' has been on the vunerable for a long time now. Filled with expensive Audio Animatronic figures, royalty-based movie clips and (worst of all) non-Disney product it's on the chopping block each quarter ABC ratings fall short of expectations.
The cheapest plan that's been "rumored" would have removed all of the physical sets inside the building and replaced them with large screens, water sprinklers and wind machines for showing 3-D movies. Think of it as a roll through 'Honey I Shrunk the Audience' (although it was snidely referred to as Paul's Budget 'Spiderman'). Taking the idea even further and to a "granduer level", the Villains would have served as the very light themeing that would have stapled onto the carnival rides of 'Shadowland' (also called Disney's Villain Adventure after the park with the same business model).
There have been other ideas for the 'Great Movie' space as well. When Eisner was very happy with 'SuperStar Limo' there was a concept to yuck-up 'The Great Movie Ride' in a similar fashion with stylized sets and figures of celebrities. Or since the show building itself is really just a big warehouse, there were several concepts to put the 'Soaring Over California' clone inside.
But even cheap replacements still cost capital. At the moment capital for the parks is as rare as hit shows on ABC. In the corporate view of the world, it's simply cheaper to keep the existing, more expensive operations going rather than invest in something new without an immediate payback.