George supposedly crunched the numbers on what it would cost to restore both versions when he was preparing for the DVDs, but Fox pushed him hard enough that he decided to rush out a cheap transfer of only the SEs (hence the Lowry project). That’s coming from the Steve Hoffman Forums guy that worked on it. That may just be his way of explaining why the work was so subpar, but sounds legitimate since George was so adamant about waiting until 2006 to release Star Wars on DVD at all.
Actually the Original Trilogy was released on DVD in 2004. Which I have to say is the first time I had watched the Original Trilogy since VHS/TV in the 80’s. I remember being shocked when Luke said “Clone Wars”.