I sort of agree, but I don't know if scaling down is the necessary thing to do for destined-pop musicals like the kind Disney, Universal, or Dreamworks produce.
Beauty and the Beast, Lion King, and Poppins are successful because of many factors. One of them being... we grew up with them AS musicals. They are already in the medium. What we see in the movie is what we get on stage (with a few additions and subtractions, but the general gist is there). Whatever was added or subtracted from these shows were done so for the sake of characterization. We learn more about these characters than we did when we saw the movie and that works.
I can't speak for Tarzan since I never saw it, but the movie does not beg to be musicalized. We didn't grow up with it as a musical. We grew up with it featuring Phil Collins hits, but that's very different from a character singing their greatest desire.
Mermaid could have potentially been another Beauty and the Beast or Lion King. The formula worked. All of the songs were where they needed to be. It was a fantastical journey. The new additions and changes just didn't work though, PLUS there was no real fantastical stage element. People are awed by Lion King's African costumes. People are awed when the Beast transforms in a split second. People are awed when the Banks' home expands it's multi-levels before your eyes or when Mary flies into the abyss. Mermaid didn't have that "Awe" factor. It had wheelies. Ursula's new vaudevillian spin could have worked if they kept the ending the same, but I think this whole "break the shell" business brought down the stakes and there was nothing of great threat to the journey. All of this on top of lackluster direction and a weak book.
If Disney were smart, they would hit up Hunchback, Aladdin, or Hercules. Those musicals are/were very popular at MGM, Disney Cruise Line, and California for a reason. Tourists ate them up...
Bill Finn rocks. Woot.