Without looking this up, was the original perception that The Princess and the Frog underperformed? I know it wasn't a flop, and I seem to recall that it was generally well received, but it just didn't seem to land like they hoped.
Wifey and I recently rewatched it, and although I remember it being a pretty good movie at the time, it was much better than I remember. I'm looking forward to how they integrate the movie into New Orleans Square at Disneyland, which is a natural fit.
I wonder, though, where would Encanto fit in the parks? The setting really isn't "jungle" enough for Adventureland, and I can't see them getting away with the intellectually lazy option of putting it in the Mexico pavilion ("It's Spanish, they won't know the difference..." says the soon-to-be-fired executive). There's no thematic connection to Frontierland. Maybe if they added a South America section to Animal Kingdom, but it seems like Disney won't add anything to the parks these days unless it has an ironclad connection to an existing intellectual property.