To be fair, I don't actually think Disney had solid plans to develop this plot or really any intention of doing so in the next decade. But I'm sure losing the option hurts, especially as they lose leverage negotiating about any future plans for Shanghai.
The 1/2 day park concept for HK (and Paris at the time of development) was a bad choice, remains a problem, and is a significant part of the park's lukewarm performance. There are limits now in Disney's ability to fix it. Personally I think HK may end up being the first Disney Park to be cut loose at some point in the future if Disney would be willing to take the reputation hit. If not, I'm not sure how they go about solving HK's problems...