Lucas was an artist who became a businessman though.
Would 1970’s George have allowed this to be made?
Possibly, yeah. There was a TON of Star Wars crap that was made in the 1970s, and not all of it was quality. Remember, 1970s George allowed the HOLIDAY SPECIAL to be made.
Also the idea that he “became” a businessman rather than was one from the start is wrong. The smartest decision Lucas ever made was to forego his director’s salary for the marketing rights to Star Wars. From that moment on he was a businessman – an enormously successful businessman with an empire (no pun intended) at his disposal.
But what’s weird about George is that he never stopped being a somewhat insane artist either. I DO think that some of his more outlandish or controversial decisions were probably made with profit in mind, but others were undoubtedly the result of a mad artist letting his creative impulses run rampant without anyone to rein him in. Not to mention in the years between the trilogies it seems he became detached from the inventive spark that drove him in the first place, so those impulses were not as good as they were before (and they were never perfect mind you).
How much did control did George really have over that sort of thing at the time? You had Vader, Chewie and the droids on the Donny & Marie show. Not to mention dancing stormtroopers. The cantina creatures appeared on Richard Pryor’s short lived sketch show. After that, the only other time SW characters appeared on a live action tv series was The Muppet Show during production on ESB. Threepio and Artoo pimped Star Tours on a one off Disney tv special circa 1986 though.
All the merchandising before 1980 was copyrighted to Fox, not Lucasfilm. Fox still owns the original film to this day.
Most of the “crap” was actually bootleg or unauthorized merchandise. The only authorized item I thought was tacky was the jewelry line. I’m somewhat baffled lightsaber knockoff toys are being made today, when Fox went after almost anyone who glued a plastic tube to a flashlight back in the 70’s. Fox went after Universal over Battlestar Galactica and even contemplated suing over Hardware Wars, but George somehow talked them out of that one.