If it was a complete mystery why they made (or used to make) video sequels, then we could ponder rubric theories about what they were artistically trying to accomplish with them--
...But it isn't. We
know why. And bzzt, sorry, thank you for playing.
A)The first sequels (including the spinoff TV series pilots for Ariel and Aladdin) came out of retroactively avenging 90's Eisner's desire to stamp New-Disney ownership on their inherited intellectual property by putting out a homegrown sequel to previous work, even though they still didn't know how to follow up on Happily-ever-after (which explains why they originally thought they were limited to Fantasia, Rescuers and Mary Poppins).
B) The next sequels came out of fear that they would have to "update" copyrights on their soon-to-expire characters from the 30's and 40's, lest Dumbo, Peter Pan and Bambi follow the path of Steamboat Willie.
C) After the legislation was changed, Bambi II came out in tandem with the original that few kids still remembered, and it was noted that since parents would buy any new direct-video sequel anyway, why not use them to retroactively "advertise" the original forgotten back-catalog titles, like Fox & the Hound and Aristocats?
And, more to the point,
D) Now that they had an entire studio devoted to video sequels, maybe it was time to go back, clean up, and "apologize" for some of those rough-sketch early sequels that hadn't played well with parents, namely Cinderella and LM II's--Particularly with the larger studio mentality that any franchise whose II is a "franchise killer", and who can't still wow 'em with a do-over III, is a "loser" franchise, and peer-pressure just wno't allow that.
But...y'know...maybe it could be the
other reason, too.