In case of Pete's Dragon, I don't necessarily see it as bad business move on the long term. Disney is obviously investing in making modern/life action renditions of their classics and just like their classics, these will become a collection eventually (and I mean the actual remakes of their classic films by this, not some spin-off/sequel like Alice is). I feel like if they continue to build on these films, having the sum of a larger collection of well received live action remakes is going to pay off. From what I gather Pete's Dragon is a good/well-made film, which will at least help their branding.
But still, there is no denying it is a very bad performer at the box office, I think they may have hoped that the big name Jungle Book before it convinced people to go to PD by it being the next Disney remake in line.