Duffy actually debuted at WDW in 2002 as part of one of the reinvention's of DD. It was tied to the opening of Once Upon a Toy, which has been totally ruined and turned into one part Star Wars, one part Marvel, a little Disney and a Jon Benet Boutique. Duffy was known as "The Disney Bear" and no one bought any.
Disney brought him back a few years later (think it was 2005 or 2006) at TDS and gave him a convoluted backstory about how Minnie gave him to Mickey for when he went off to sea and through their love, he came to life and became 'Mickey's companion' and, yeah, it is vomit-inducing. And all the Tokyo office girls went nuts and DuffyMania was born (sadly). Disney has since tried to make Duffy a big deal in the USA, Paris and HK and basically the only place that has embraced him at all is HK. They are using him a lot at SDL now as well.