I think one of the main reasons villiany has fallen in Disney is two-fold:
1) Disney has managed to get a very strong "Any Age" and "Ages 7-12" sort of rating. This means that virtually everything that they intend to do has to be sandblasted down until it's kid friendly, or at least a PG rating.
Disney has probably been asked numerous times (
by insane soccer moms who say they like Disney products, but probably hate them with an intensity of a thousand suns because they seem to promote the idea that children can grow up and do things on their own <_< ) to "tone down the violence" and probably something like "it would be nice if the bad guys were allowed to reform".
2) It's to make the villians easier to understand. When you start getting into things like racial hatred or political motivations, the villian becomes complex. And Disney villians have always been fairly easy to understand.
Manipulators and psychos are the most likely to seek power, while jerks are more likely to seek fame and riches. Vain people, like the Queen in Snow White are also easy to understand.
Shan-Yu was a power-hungry psycho, so he was limited to a terminator brain. Ingenious enough that he could survive and get to his goal, but then his brain shorted out.