This is my take on it as well. There was a Buzz toy and an accompanying animated TV show. Now, years later, they're doing the in-universe equivalent of a "live action" feature film adaptation.
It also explains why it makes sense not to cast Tim Allen to voice Buzz. Since, in-universe, "Lightyear" is not an animated film, it would star actors who are real people who exist in Andy's world, and because the voice actor for the Buzz toy and cartoon would most likely look nothing like Buzz (especially 20+ years later), they would have had to cast a different actor.