Yes you are right. We had a lovely long Christmas vacation one year and that area was quite a memory maker.
By day it was still the full Backlot tour and by night the homes were the area of the Osborne Lights that moved through the NY Street and pretty much ended outside the Steamroller area with a nativity scene near the courtyard. It was nice that there was a gentle reminder of what Christmas was really about in the middle of all the magic of WDW.
My DS was only a toddler when he went through Catastrophe Cannon and already had this enormous fear of any form of fire so it was also filled with that learning curve for parents as it was a brand new park for us too and no forums to research and the tour books just outlined what was to be attractions vaguely. Good times back there on the lot.
When we rode the Backlot Tour, 'cause we knew it would go soon Walt's plane had 'Cars' eyeballs pasted on the front of the plane. I'm not sure why I took exception with that but it did rub me the wrong way. We took one last walk through the prop room too and the after museum. Way back the Backlot also had a show to demonstrate inside a warehouse how they used illusion in filming. We have pictures of my DH riding a bike on set during the show and my DS riding the bumble bee also during the show. Pretty much any connection to the park being a Studio is gone now and I'll miss that theming.
I went mental over that one, and I recall a thread (months ago) up in N&R or General, about this fiasco, and many hated it. 
