I might be a little happier if they were milking something they created instead of dipping into the vault so much. Seems that this well will run dry(probably after Mike is in retirement) somewhere down the road.
The well running dry is really my only direct concern with the sequels. We saw Peter Pan and were happy with it. We bought Mermaid II and were not. I picked up Cinderella 2 yesterday, but if it disappoints, I'm not likely to pick the next direct-to-video feature.
My non-insider view is that it would be unrealistic to only ask that the new features break even, but its also unrealistic to expect them to match the sequels return percentage-wise. Unlike a film, the budget for an animated sequel can easily be much lower than the original. But to your point, Larworth, in the big picture, if there are no original blockbusters, the sequel well will eventually run dry.
I really think it will happen faster than many think, and for two reasons:
1- More of them coming to market.
2- Franchises tend to lose their marketability with subsequent sequels, and many of Disney's hits have now already had sequels (Lion King, Aladdin, Beauty, Pan, Cinderella, Mermaid, Tramp).
I'm not saying they won't make money, but the cash printing machine will not run forever unless its gets new paper.