Lots of classic films (My Fair Lady, Lawrence of Arabia, for example), have had partially or completely destroyed negatives and managed to go on to have extraordinary restorations, using IP’s, private collector prints, and so on. That said, the film stock quality for those films was much better than the film stock used for Star Wars and Empire. It’s a matter of will, and that’s the main thing missing at Lucasfilm.
Exactly. It should be possible to use at least 2/3rds of the separation masters and IP’s/Technicolor prints and wind up with a brilliant restoration without even using the original negative. The reasons for not doing it have nothing to do with Lucasfilm’s technical ability.