Yes, I very much agree with this. There's a very easy solution to the issues that the figures of the movie's characters raise: do something else! Figures of the characters would be literally the lazy first suggestion that someone with no experience in themed design would come up with. WDI should be able to come up with something better, and it's not like other oversized items don't present fun and interesting possibilities. It's generally not a great way to put guests in a character's world, anyway. Galaxy's Edge, for example, doesn't have random static statues of characters from Star Wars scattered around the place.
An interesting thing to ponder is how Snow White wasn't initially featured in her Fantasyland dark ride as the idea was that the rider was in Snow White's place and so it wouldn't make sense to see her. That ended up being a case where guest expectations eventually led them to abandon that initial conceit, but it does show a level of thoughtfulness about creating a consistent and believable experience that Toy Storyland doesn't right from the earliest days of Disneyland.
It seems that they settled on using oversized fiberglass character figures for the land because that's all there really is to reflect the notion of "Toy Story." Ultimately, theme parks are their best when they provide moody and evocative settings, rather than linear or character-driven storylines. But when you think of settings from the Toy Story films (particularly the earlier ones), they're largely unremarkable spaces for the suburban families that comprise WDW's key demographic: suburban house, suburban backyard, gas station, moving truck, etc.
Pizza Port is the one Toy Story setting that generates ongoing interest for a theme park, but it was quickly ruled out once WDI decided that the land would be at the scale of the toys, since the exciting aspects of it are all human-focused. This may have been a blessing in disguise, as Disney's 3 previous attempts to create this location for the parks (in MGM, DLP, and DL) have all been half-hearted attempts that fail to capture the energy and excitement of the movie scene.
A focus on environment rather than characters the same reason why Pandora and Mr. Toad's Wild Ride are perennially popular (despite being based on films that have largely left the cultural zeitgeist), while the brand new Avengers Campus at DCA generated lukewarm-at-best reviews (but is based on the hottest global film IP that's possibly ever been created). Pandora does a great job of capturing the mysterious atmosphere and awe-inspiring scenery from the film, without requiring any knowledge of the plot itself; Mr. Toad mirrors the zany madcap energy of a chase scene that was mostly created for the ride.
Meanwhile the Marvel films and comics are mostly character-driven, which just doesn't translate to a theme park environment, regardless of how many flavor-du-jour superheroes they parade through the land on a rotating basis. The land's setting as some sort of fictional community college for aspiring heroes simply isn't very interesting, which reflects the films themselves: while there are all sorts of cityscapes, high-tech labs, and fantastical vehicles, none of them have any deeper meaning than simple backgrounds. Even Galaxy's Edge ran into this problem, as the Star Wars franchise largely focuses on character relationships and good vs evil (despite a plethora of memorable locations and a distinct visual style), a flaw that was only highlighted when the entertainment budget was slashed prior to opening day.
There's an old story of WED designers in the 70's trying to create a dark ride based on the then-current Robin Hood animated film, but as development continued, the locations of key scenes began to feel repetitive and uninspiring: forest, forest, castle wall, forest, garden, forest. The concept was ultimately cancelled, not because of how popular the characters were but because it wasn't a good concept at its most fundamental level.
Similarly, when considering settings from the Toy Story franchise that are memorable, moody, or evocative, there really aren't many to choose from; worse yet, the films barely even have a distinctive visual style for the physical locations audiences associate with them. Other than the characters themselves, there's really nothing to indicate that this is Toy Story, rather than generic toys in a generic suburban setting. Even the land itself is littered with various toys and board games that have long existed outside the context of Toy Story. A major selling point for the films is that they occur in our world with toys we already own, which just isn't very fun for a theme park, which should transport guests somewhere new and exciting.
It's not only that the theme of Toy Story Land was poorly executed, it's that the theme itself was ill-conceived for a theme park land, and plopping character figures here and there is really all they could do with it. But even that was done poorly.