It wasn't necessarily the case that it was too close to the last Star Wars movie - I'm still sure that Star Wars can be like the MCU.
But they made the mistake of making the star wars universe feeling incredibly small through the spin offs - and the announced spin offs at the time were even worse. There was a yoda spin off planned..
Star Wars needed to expand and focus on fan favorite characters that didn't have movies at the time. Things that were fan favorites in the old Canon that were not yet adapted for the new one. Thrawn or Mara Jade could've turned heads, KotOR would have been impressive.
Fans would have been stoked to see them on the big screen, coming from the books and games similarly to new MCU entries.
But focusing on Yoda, Han, the Death Star, all prequels, all tightly connected to what we know by heart already and overly explaining things we dont want or need to know is not a way to expand the universe, it's a way to shrink it down.
The Mandalorian does the right thing - it's completely unrelated to any known Characters and that's the fresh shot Star Wars needs.