Did Disney utterly ruin their reputation back then? And did they intentionally piss off a large portion of their customer base? Did they kill enough golden egg-laying geese for several Christmas dinners?
Ho boy did they ever. People wrote death threats to Disney execs over some of their terrible decisions in that era.
You probably haven't heard of most ofmovies from that era because they were mostly flops.
Robin Hood and
The Rescuers were their last good movies of the 70s.
As far as terrible decisions, Lucas offered them to get in on the ground floor of Star Wars before its release in 1977 for the bargain price of 10 million dollars, and Disney rejected it entirely believing the movie would be a complete flop. So yeah, their opener was to decide that Star Wars was a sure loser and go the opposite direction. Disney then learned the entirely wrong lesson and decided they didn't want to make kid's movies anymore and tried to horn in on the horror movie market and abandon their core demographic. No, I'm not kidding.
Disney went first for
The Black Hole which has a bit of a cult following but was also the first Disney PG film, and in those days PG was considered a big deal and not for kids. So it flopped, earning less than
The Love Bug had done in the late sixties on a tiny fraction of
The Black Hole's budget. They followed this up with
The Watcher In The Woods, a horror story that possibly inspired the superior
Evil Dead shortly afterwards, or at least a number of shots and camera angle uses are quite similar. Then they came up with
Dragonslayer featuring winning kid-friendly scenes like a woman covered in gore struggling as a dragon slowly roasts her alive. Not learning their lesson, Disney went on to make such winners as
Something Wicked This Way Comes,
The Devil and Max Devlin, Night Crossing, and
Never Cry Wolf.
At two points in this period, Disney barely managed to avoid hostile takeovers by rival companies who were curbstomping them in the Kid-Friendly department with movies like
E.T. and
Annie. The problem was that nobody took Disney seriously as the major adult player Miller wanted, while the constant depression and horror fests alienated all their core audience.
As far as burning beloved franchises, at that point the Chronicles of Prydain were regarded as pretty much the equal of Tolkien but far easier to read and with fewer ten-page descriptions of a random tree. Disney muffed
The Black Cauldron so badly (by deciding to fill it with horror imagery of course) the franchise that could have been LoTR's equal or even superior is barely remembered today.
Disney went through the same process they're going through right now, a faction fight ensued and Miller was ousted by Eisner and Katzenberg, who cemented their position with
The Little Mermaid returning Disney to its roots in making successful kid's movies in the late 80s, then created Disney TV shows like
Duck Tales and
Goof Troop that let Disney's battered finances recover by opening into untapped markets.