The Doyle estate lost the case you're referring to and Klinger was allowed to publish his derivative stories.
Disney could try to sue, but I don't think their case is any stronger than the Sherlock Holmes case if the defendant is only deriving material from the original Mickey cartoon.
From the case listed "And the claim is correct, for he acknowledges that those copyrights are valid and that the only copying he wants to include in his book is copying of the Holmes and Watson characters as they appear in the earlier stories and in the novels."
Mickey Mouse will most certainly not be in the public domain anymore than he is now. Disney can also fall back on trademark law to take care of Disney's use as well.
It's a bit of a moot point in my opinion, because I don't think anyone outside of Disney would even want to make more of 1928 Mickey. It's old. It's not popular. Maybe they'd use him for a cameo or for parody, but shows already do that anyway, regardless of the copyright [1].
Couple of other issues.
"Small studios and independent artists could use the original Mickey character"
"Other manufacturers could make Mickey Mouse merchandise. This is probably the biggest direct harm to Disney, but I don't think it'll make much impact on their revenue."
The reason you've seen them make Steamboat Willie LEGO and the current "old-style" Mickey Mouse cartoons is because they're setting up a copyright argument if someone tried. They're also setting up the same arguments that Sherlock Holmes uses which is that the elements of Mickey in Steamboat Willie have been used recently and are thus still locked up by copyright. You can distribute Steamboat Willie, but can not otherwise use the property. The Sherlock Holmes case is here: https://scholar.google.com/scholar_case?case=163248743572192...
"Which is exactly what copyright was supposed to encourage."
No, copyright is an exclusive distribution right. It's a government granted monopoly to provide protection to creative works. The history of copyright is pretty interesting in an of itself and starts with the printing press in the 1500s. Long story short, though, it's always been about commercial exploitation of a creative work.
This was edited to correct some info.