Did someone say the problem was in the source material, like the raw material used to create the new mix. Even if some of the sources were degraded that does not explain the poor mixing overall.

And why is a sound designer mixing the film?

The original star wars and special editions were not elusively mixed by Burtt. The only case i can think of where he did his own mix was in 1985 and that was based on what was produced in collaboration with a bunch of other people. Oh and he supposedly mixed star wars in 1993 too but that was not a horrible mess.

It also does not explain how in 1997 they ended up using sources of higher fidelity closer to the original recorded material with fewer generations in the source. Why would it just suddenly sound bad in 2004?