The debate about Full Monty vs. the Producers will never die. I am not sure how it applies to this discussion of the movie musical. Oh well.
As for the Producers movie, it is neither as bad as most people paint it or as good as it might have been. Brooks wanted the movie to be directed as if it were a staged version and/or an old fashioned movie musical. As Lane has said, that didn't work too well, but it was the production team's decision.
Thurman was certainly a better choice than Nicole Kidman, though I would certainly have preferred to see Cady Huffman in the part. You also need to remember that many of Brooks' movies were not box office hits but became cult favorites and succeeded in VCR/DVD release and/or in repeat broadcasts on TV. The Producers movie was not well received and did poorly at the box office when it was first released in 1968.
I would also note that when it comes to judging Lane's body of work, one must consider a) he was directed to act this role in an over the top way because Brooks wanted the movie to be like a staged musical (in your face, as Brooks would say), b) to point to his other movies and TV shows as evidence of his inability to succeed is slightly unfair. First of all TV shows fail all the time and many Broadway actors have had a number of failed TV shows because in most instances TV does not know what to do with stage actors. In the case of Charlie Lawrence, Les Moonves pulled the show after 3 episodes (just as the network did for John Lithgow's show this year). It was pulled because Moonves was feeling shaky about the idea that the lead character was gay and that the production team had the intention of exploring this side of Lawrence's life. The way the network handled this was poor at best, but such is the life in Hollywood c) Lane has never actively pursued Hollywood and movies, preferring to stay faithful to the stage, so his roles are infrequent and smaller, and d) he is not considered a 'lead actor' in Hollywood and never would have been because Hollywood only likes young, skinny, cute actors and actresses so Lane's roles will be definition be limited to character roles. Nichols talks about thinking he would make Albert more over the top in the film The Birdcage, and it was Lane who brought the role down to a human level.
The bottom line is that while it is common for us to cite ONE reason for the success or failure of any project, in fact there are many variables in art, and no one thing can explain a career or a body of work. Board members have been talking about Deuce being as bad as it is, and in that case it is also true that there are a lot of reasons the Deuce production team is in this position. In reality life (AND ART) is always a lot more complicated than we like to think.
"Life is a lesson in humility"