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Most certianly not. There are plenty of prints lying around. Even if the original masters have been cut up and destroyed forever, the fact of the matter is the vast majority of the films are unchanged from the originals to the SE, in other words, most of the film is already restored in its original state with the 1997 versions.
No doubt Lucas as access to plenty of decent copies of these films that could be used to restore the films. Even negative 1 got his hands on some pretty decent 35mm reels of the films and posted lots of scans from them here, they don't look to bad. In the hands of a professional company, these films could be restored in quality even higher than blu-ray with relatively little effort. A certian person's stubborness is all that keeps these from us, and that really sucks.
Thank you. :) It's heartening to hear that. Gives me hope.
A question I'd like to ask is... these prints existing that Lucas doesn't have in his possession, you definitely think there's enough of them around in good enough condition? Would there still be say ten years from now? twenty? And do people other than Lucas legally own them or are they legally Lucas''s property even though Lucas doesn't hold them? (Because if Lucas had legal claim on any prints he'd be free to destroy them if they were handed over to him to make dvds out of.)