At a budget of 11,000,000, that's only 2 million under Star Wars, and 7 under Empire. So I don't see how that makes it any more "low budget" than Star Wars. It's not an astronomical figure, but certainly not a B movie like the term "low budget" suggests.
Zombie, yes it did recycle footage from The Motion Picture. This is however due to the shear abundant amount shot for that film. It was felt that instead of wasting money shooting establishing shots, a couple of shots from TMP could be edited and fit in. They even reused models. I'm sure if they hadn't you'd be hear saying how they wasted money, which they would've. It's a wonderful exercise in intelligent cost cutting. This was done to conserve money for the Mutara Nebula sequence, which I still think is one of the best examples of model effects on film.
For what the film called for, I'd say Wrath of Kahn is easily on par with the classic trilogy in terms of how models can exceed CGI.