I can understand why Disney makes sequels, people love the characters in Toy Story, Little Mermaid, etc, and want to see more of their adventures. And while the production values aren't as wonderful, they still provide that niche.
The key to any film is good solid storytelling. Disney has lost that. It doesn't matter if it's bad animation like South Park or the highest quality Pixar computer graphics or Live Action. If the story sucks, it sucks. And that's Disney's problem. Storytelling is not just taking a script and recording it on film, it's a combination of many things.
The loss of the artists in Feature Animation not only created a void in the animation style, but also took away some major talent that were instrumental in rounding out the story with classic gags, etc. They were the heart of the project. I remember Bill Keane talking about how he envisioned Beast and what Beast would do, how he would act. Sure the script could say, "Beast touches Belle's cheek.", but the animator would make that screen direction memorable.
Pixar has such people in John Lassiter who sees beyond the story, Shrek's creators have the same thing. Disney has not shown in many of their recent projects, live action or otherwise that same depth and that is what is going to get them in trouble.
As far as DTV, I don't mind that, or sequels, as much as horrific remakes that Hollywood seems bent on...