As much hate as the Xerography process gets, this really wasn't true. The character designs for 101 Dalmatians were incredibly expensive, and they blamed the spots on the dogs. Part of the reason Bluth left was that cost control controls were put into place because of how expensive Dalmatians was.

The real problem is that Disney movies boom or bust. The insane successes (Snow White, Dumbo) were offset by busts (Cinderella, Bambi). Ironically, even though we remember these are huge successes now, Bambi was released in the middle of WW2 when the international market was cut off, and Cinderella was a box office bomb.

Disney still has this problem, which is why the death spiral of a Disney CEO is always when they start greenlighting sequel after sequel.