From my understanding of the issue, it was not a budgetary thing that stopped them from proceeding.
Heck, everything was designed, made, and the performers got paid even though they DID NOT follow through on the idea; which hardly speaks to it being a money based concern.
If I am remembering correctly, they got cold feet on doing it because they were afraid WB/Rowling might not like it/might make them stop.
It would also be something that could potentially draw families who love Potter to attending a Halloween event that was clearly not catering to their tastes outside the one thing, which would have been a PR issue.
If anyone has contrary information, please correct me if I am wrong.