minor muppetz
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The story was in the public domain, but the adaptation can have original elements which can't easily be used in other adaptations. Many of the original elements in the 1939 film (like how the Witch looks, the songs, ruby slippers instead of red slippers, there only being one good witch) just happen to be among the things casual audiences associate with the film. I wouldn't be surprised if having a cast member appear as one of the characters would count under Warner's copyrights to the film.What? So something in the public domain gets adapted and gets copyrighted.
Even when works are in the public domain, companies can make a case out of them including things that are still under copyright. It's a Wonderful Life is in the public domain, but the script is still under copyright, and the copyright holders made a big case out of that, and since then, video and television releases of the movie have been limited. Many of the public domain Looney Tunes and Merrie Melodies used to be heavily available in public domain video collections, but I think Warner Bros. eventually made a case out of the fact that the company still owns the characters and music, and it's less common for those shorts to be in videos from public domain companies (the main exceptions seem to be for Bosko and Private Snafu, but Warner never owned the rights to the Bosko character, not sure about Snafu but since those shorts were created by the government they're automatically public domain). I've also read that Disney made a case out of the few Disney shorts that are in the public domain for the same reason.