As to your other point, it obviously makes HUGE financial sense on paper. You can only make a certain amount from the Luau + it's costly to run and as you said, there is some of the stereotypes they've been trying to get rid of in the luau (of course it's not too much different from luaus i've done in Hawai'i).
A DVC resort along Seven Seas Lagoon will sell out quick and for an extremely high price. It's a way to inject some quick profit on the initial payment and then basically lock families into coming and giving money to Disney for the next 50 years, and probably paying close to $60-$75K on Annual Dues over the course of that 50 years per member. That money makes it so improvements to the resort or the necessary resort refurbishments after 7 years (per contract) are basically free for Disney to do since they're using the members money for the most part.