Just saw this...
The deals for new toy licenses were negotiated 1991-1994. Playmates actually very nearly landed the master toy license, and upstart McFarlane Toys also made a bid. But LFL went with Kenner, who impressed them with their plans for the Action Masters diecast figures and because they still had several of the old molds that could be reused for vehicles and such.
Before that, JustToys came out with the weird Bend-ems (bendable figures) that sold like hot cakes and Galoob started their Micro Machines stuff, which also flew off the shelves. This showed Lucasfilm that people were not only starving for new SW stories, but new merchandise as well.
Like the Zahn books, it wasn't so much about quality... it was timing. The first SW stuff was going to sell through no matter what it was.