No, I don't think they regret it at all. The choice of the Avatar IP was not really about the movie itself (IMO), it was about the visuals, the innovation and most of all the highly detailed and elaborate world that Cameron and crew created. I saw Avatar in the theaters, twice, and did not go see it for the story in the least bit. I mean the story was serviceable, but cliche. The visuals were amazing however. To this day, years later, Avatar is still the best use of 3D I've seen in a movie. And I'd imagine the new avatar films planned for later this decade will be equally as visually stunning.
Look at Tower of Terror, for example. It is based on an IP (Twilight Zone) that most, if not all, young people have never seen or heard of, or if they have, know probably nothing about it. But the IP isn't what makes the ride. The incredible detail, theming, SFX and, of course, the thrills, are what make ToT one of, if not the, headliner ride at WDW. Same with RnRc. Yes, Aerosmith is big, but somehow I doubt many of today's youth connect much to them or know their music well. But the ride is awesome, so people ride it.
If they do Avatar right, it won't matter if people liked the movie, know about the movie, etc. It will stand on its own. At the end of the day, the IP isn't what makes an attraction or land a classic, it is what's put into that attraction or themed land.