Almost. TS2 was originally a direct to video film. But Disney liked the work-in-progress so much that they approved making it a feature film. And Pixar management at the time wasn't really thrilled with the idea of having an "A" team that made feature films and a "B" team that made DTV films. That could lead to morale problems in the B team. It was much later that problems in the story lead to replacing the director and doing the restart.