Because the main show is like one animatronic and some cardboard cut outs.
This hypothetical would be vastly superior because you would have the whole room to work with in presumably performing songs from the film to accompany the storytelling. If there was some child audience participation props, could probably be something like those tapa pictures that Grandma uses in her storytelling in the prologue instead of clipart on sticks. Really, it'd probably be more like that unused Beauty and the Beast animatronic show concept for Paris that had a live Belle then anything else.