They only released Babes in Toyland because they needed a Christmas feature release for the 2012 holiday season.
They released it in February 2013 with practically zero fanfare, typical of all those titles they released back in 2012. I still remember how rushed-out they felt. Even some of the not-the-biggest-but-bigger-than-most titles seemed like rush jobs, and many had to be postponed due to production errors. I didn't see advertising for any of these titles anywhere. The 1961 Wonderful World of Color episode "Backstage Party" that dealt with its production and its wrap party was nowhere to be found, either, though it was on a Walt Disney Treasures DVD release. Extras are no longer a high priority, and some of the legacy ones still get dropped regularly, although in hindsight how is this different from the jump from laserdisc to DVD? There are still some Alice in Wonderland Exclusive Archive laserdisc extras that haven't been seen since. Same deal with that "Operation Undersea" anthology series episode that promoted 20,000 Leagues Under the Sea. It was on the laserdisc, but not the DVD, and since that film's Blu-ray was tied to the now-abandoned David Fincher remake, who knows what they'll do with the film itself now, never mind the TV episode.
These movies are not ones you can just throw onto Blu-ray with little effort and expect everyone who enjoys them to keep buying and re-buying every edition out of habit. It's the ultimate Catch-22: buying a bad disc is like rewarding them for cutting corners, thereby making the consumer an enabler, but don't buy the disc and the studio will think it's the movie's fault. People who saw them when they were new are not getting any younger, and many young people have never even heard of them. In the case of Babes in Toyland, though, it's hard to say whether a disc with more extras (or any extras at all) would sell better than the ones we got, but Disney has never tried (although the marketing department went into overdrive when it was a new release). That's about the only way you can make a re-purchase of this particular title look appealing to me.
I have it--it's a beautiful disc. If it didn't sell, it's because it's a crummy movie.
Unfortunately, I cannot disagree with the opinion that Walt's Babes in Toyland just isn't very good, and it was not a good choice to get the ball rolling on getting Walt's live-action films to Blu-ray. It is a good-looking one, though, and only now has it gotten a video presentation that does its main redeeming feature, the art direction, justice; the DVD was from a MAR 1990s transfer intended for laserdisc. Ward Kimball never should have been taken off the picture; he was the original director and lost his job under mysterious circumstances. Even so, the script, on which is the bulk of problem. Tom and Mary just aren't particularly interesting protagonists the way they are written, and some of the recitative dialogue is so cringeworthy (notice how none of the post-Snow White animated features have that kind of operetta-style recitative), not even Ray Bolger—this film is what they made instead of Rainbow Road to Oz—can sell it. And what was the deal with the talking animatronic goose? The script gives him some sarcastic one-liners to open the film with, and they fall flat, making him look kind of like a jerk. And they could have done a lot more with Mother Goose as a character. Trying to make it look like a filmed play took the audience out of the illusion, but there is one long crane shot of Tom and Mary dancing that really works.
Nevertheless, I'd watch it before I could bring myself to watch the 1986 Keanu Reeves/Drew Barrymore/Richard Mulligan version, which was a three-hour NBC broadcast that was only made available on video in a substantially cut form, again, and I can't even bring myself to watch the 1997 animated version. There will likely never be a faithful cinematic adaptation of Victor Herbert's operetta, so you might as well stick with Laurel and Hardy. It does have some minor historical distinction as the first live-action musical the studio made that wasn't a live-action/animation hybrid (technically, the two Bobby Driscoll/Luana Patten hybrids count as musicals). Elements of the film later ended up in both Mary Poppins (the gag with the mirror's reflection talking back) and Bedknobs and Broomsticks (a climax with inanimate objects coming to life to attack the bad guys, while the unused Rainbow Road to Oz design for the Cowardly Lion looks like a prototype of King Leonidas of Naboombu; coincidentally, Ward Kimball was the animation director on this one), and the toy machine reminded me of the Everlasting Gobstopper machine in Willy Wonka and the Chocolate Factory, which wasn't even a Disney film! Annette had some nice things to say about it in her autobiography (maybe it should have come out after her death), and Tommy Kirk said it was not nearly as bad as some of the films he made for AIP.