Technology has moved on and the intended audience is more interested in CGI and modern stuff nowadays rather than the classics of our childhoods.
I have to disagree on that count there.... the "modern audiences" want to see these cartoon characters as flat CGI's against a live action back drop. That's why this was DTV, and the horrible one where Garf looked like a horrible cartoon/live action Cross breed. In fact, i'd rather have seen Underdog and Alvin and the Chipmunks look more like this than what they became.
I agree with Frgoboy here, this is far from crap looking. John looks a tad awkward to me, but everyone else (especially that guest character in that shot) looks great. And as for a DTV movie, well, we'd be getting crappy flat looking Korean 2-D if we got 2-D. I cannot stand how all the Warner Brothers cartoons look now. They clearly use an inferior studio. it looks so perfect, it's mechanical. Makes me really miss the odd Japanese outsourcing from the 1980's (especially TMS's work with DIC animation and Disney).
The companies certainly seem to think this is true. Except that I've rarely seen this way of thinking reflected in real life, heh. Audiences are not robots, they don't go around thinking "old cartoons bad, CGI good. Or vice versa." There are kids who enjoy the classics, even if they also like CGI. Sadly, what ends up on the screen doesn't necessarily have anything to do with what the intended audience actually wants.
I tend to think that's why every single animatd movie since has been CGI. Plus, come on. Pixar and Dreamworks made money. They are clearly utilizing a technology for money making purposes. As I said before, I think Pixar is
the studio that gets it. They have CGI down to a fine art, but they also have beautifully designed characters, wonderful scripts, and some bizarre lovable ideas. Dreamwork's has pretty decent films, I feel, and Blue Sky has great animation, but their scripts are only so so. To me other studios just want to get on the "fad" of this type of animation.