You're right that Mermaid missed. But it's because of budget cuts. The original concept was very cool. Somewhere, a helpful member posted the concept video. You'd actually go under the sea.
I don't think it missed because of budget cuts. The budget of the Mermaid in the video would likely have been 1/2 of the one that was built.
That video originally came with a Mermaid DVD and was for a completely different project than what came to MK/DCA. The video represents the original Tony Baxter/John Stone C-ticket darkride designed in the early 90s for Paris and revived a decade later when planning HKDL (which is when the on-ride video was produced).
MK's Mermaid came about because of DCA. The attraction was designed by Larry Nikolai to fit in the space available behind Golden Dreams' facade and then to be copy & pasted in MK's new Fantasyland.
It's interesting to imagine what the advantages/disadvantages of each, as the Baxter version, like the other FL darkrides would have contained zero AAs - only limited-motion animated figures and more scenic flats such as those you find in Pan or Snow White. It would have been zippier and probably more fun.
Nikolai's slow omnimover has the advantages of being longer, more relaxing and utilizing full Audio-Animatronics. I do think it really fumbled in its show-lighting design (an artform that seems to have been lost) in that many scenes point your field of view directly at exposed lighting rigs. That and its slowness exacerbates its static figures in a scene or two.
I still think Mermaid is a good addition to the MK.
The only E-ticket Mermaid ride planned for MK (that I've seen concept work for) was a LPS system (Hunny Hunt), that pre-dated Rasulo's New Fantasyland project by a couple years.
[connects this long post to Naavi river ride because they're both slow moving atmospheric attractions?]
