Not only was Luxo Jr. a maintenance fiasco, apparently Disney didn't really have the full rights to create him from what I understand. Since he is based off of an actually product by the Luxo company not associated with Disney. But again, the main reason was the maintenance. Coming out of his little doors he has bumped his head a couple times. I've heard a kid threw a rock at his lightbulb and broke it once. Plus, he wasn't entirely protected from the elements very well. So the amount of money going into Luxo Jr. was not worth it. He wasn't crucial to an attraction or show. Some guests would notice him, others wouldn't, and he didn't even have set show times or advertising to draw people to him. It's like spending thousands of dollars to fix an animated lawn gnome in your yard. Sure it looks cute and entertains people that notice, but at some point, you'd pull the plug as well.
