The key reason why this failed is that it was prohibitively expensive to run. They had to maintain a cast of professional actors, and even minor hotel staff had to maintain story and character.
There’s a very small audience that’s willing to pay thousands of dollars for a Star Wars LARP, no matter how professionally it’s produced.
Yeah, the TV really breaks the immersion.
Commenting to creators with specific things that I like about their work
The Naked Now was a bizarre choice for such an early episode. It’s the very first one after the premiere, and it’s based on the crew acting out of character – before the audience has had time to learn what their personalities are supposed to be.