The problem I've always seen with the prequels is that there was no one who said no or questioned Lucas on a serious level. It's not just Lucas, when you start delving into any movie or franchise, the best ones always tend to be ones where the director was constrained by their team or just by budget/operation constraints. When it comes to the prequels, you can see it in the behind-the-scenes content and commentary that no one ever stood up to Lucas and said "Yeah, that execution of that character/script line and that idea? It's terrible and you should rethink it or scrap it!" When you don't have a voice of reason, this is how you get midi-chlorians and Jar Jar. It's very rare that you get an unfiltered product from a director with free license to do whatever they want and it comes out good.
Now about the OP's video: it could very well be true that the older characters/models/etc. were shelved for the new trilogy for merchandising (might have even been part of the right's deal with Lucas), but that probably has little bearing on why the new trilogy is as it is. Story structure, plot, and scripting are not merchandising, and those were what leave a sour taste in most people's mouths. Disney could've made really great new characters supported by a great movie trilogy, and that would've generated tons of revenue in terms of merchandising. Considering that this discussion is even taking place likely means that not everyone agrees that the new characters are on the same level as the old ones. I'd still point the finger at Rian Johnson when it comes to where the current trilogy is after TLJ, as the only movie that most people here probably even don't know he wrote/directed of any note is Looper. Disney should've stuck with someone who had a proven track record, but I'm sure somewhere they realized that there's enough people who will watch anything with a label of Star Wars.