Those low budged productions and rip-off mostly didn't even made it into the theaters. Thumbelina on the other hand did and it's well known enough, being a Don Bluth movie. So I doubt that Disney will take it up anytime soon.

I think he tried too much to copy Disney in this one - I mean there is really every Disney Cliche imaginable, from the opening book, to the frame story with the narrator, to the "I want" song, to the love song (in a sequence which looks very much copied from Aladdin), up to the falling villain and the death hero who is alive after all. There is no creativity at all in this (though I like some of the songs - just not in the context).