Bull. That's complete wishful thinking on your part to assume the average retailer can't distinguish between a DTV being put out on the market for kids and a feature film released on DVD.
Clearly they can tell the difference between the products, but the brand name remainst he same for both.
Its partly subconcious, but when you keep seeing a brand name slapped all over cruddy products, its going to affect your perception of the brand. That is unavoidable.
Now, to a certain extent I agree with you. You can mitigate that affect through using different marketing and distribution channels. Certainly a bad DTV film does not have the same negative impact on the brand that a box office bomb does. No doubt about that.
However, Disney has released several of these DTV films in theaters, and that has done significant damage. Plus, the sheer number of these DTV movies has a cumulative impact as well. Like I said, the impact of one bad DTV film doesn't equal the impact of one bad box office film, but Disney flooded the market with these things, and there's no doubt the cumulative impact is not negligible.
Just like anything good enhances a brand, anything bad detracts from it. You simply can't have one without the other. That's the danger of focusing on "leveraging the brand".
I'm not saying they shouldn't make the DTV sequels. But I do think they would be far better off in many ways if they put more effort into them. No, not give them feature-type budgets, but there most certainly needs to be more focus on the stories instead of on "leveraging the franchise".
Yes, the public does understand that a DTV film isn't going to be the same as a feature film. However, that understanding only goes so far, and Disney has most definitely crossed that line.