First, Miley Cyrus at the Teen Choice Awards (yes it's a stripper pole on top of an ice cream cart):

[click Picture to enlarge]
And her nine year old sister, Noah, at the party thrown by the Teen Choice Awards:
Disney has been very good in the past at extracting lots of money from parents of "tween" (ages eight to twelve) girls by pushing a series of (highly disposable as they age) Pop Princesses. From Lindsay Lohan ("Herbie Fully Loaded," Hillary Duff ("Lizzie McGuire"), Melissa Joan Hart ("Clarissa Explains it All"), Britney Spears, Christina Aguilera, Vanessa Hudgens ("High School the Musical"), Demi Lovato ("Camp Rock"), and Selena Gomez, to of course Miley Cyrus, a common theme runs through the characters Disney creates. An "ordinary girl" who is of course far prettier than an ordinary teen age girl, between the ages of 13 and 16, discovers life outside her sheltered family, as a secret wizard or witch, princess, or pop star (no it doesn't make sense it's for kids). Girls eight to twelve have reliably consumed this basic princess fantasy, since 1991 and "Clarissa Explains It All" on Nickelodeon. Variations include actual pop princesses (Spears and Aguilera on "the New Mickey Mouse Club") and ordinary-girl/pop princesses hybrids such as Miley Cyrus on "Hannah Montana."
As recent as 2007, Cyrus's concert ticket sales and album sales netted her $64 million, and #11 on Billboard's top earners, higher than Faith Hill and Bon Jovi. Tween girls love pop princesses, and Disney has excelled in giving them what they want. Disney's only concern is tween girls don't make their own money or buying decisions, their parents do. Sadly, Disney has always had a seamy side to the pop princess machine.
First, there's the issue of disposability. Girls age out of appealing to tweens, when they get too "old" which generally happens around 16-17 or so, and no longer become fantasy figures of pre-adolescents (the way say, Superman or Captain Marvel is for young boys) but rather "near adults" that tweens find harder to identify with (presumably because of overt sexual issues and looming adulthood). Most of the Disney princesses know from past experience with other girls, their shelf-life approaches that of the average NFL career: four years. Indeed, Hillary Duff, Britney Spears, Christina Aguilera, Vanessa Hudgens, and others all started to make their transitions out of tween roles at around age seventeen or so. Some with more success (and happiness) than others. Every girl (and her management/agents) knows that her time as a Disney pop princess is limited, and as such her transition to adult roles must be fairly rapid. Hence the built-in incentives for the pop princesses in transition to act "adult" or take on adult roles as rapidly as possible.
Second, the business itself can be seamy. Teen star Lindsay Lohan famously spun out of control. Britney Spears was famously, briefly institutionalized. Sister Jamie Lynn Spears was pregnant at 16, while starring in "Zoey 101" for Nickelodeon. Rumors (never proven) had it that the responsible party was not the named, 19 year old boyfriend, but a Disney exec. Either way, the end result is not particularly wholesome family fare. Some Disney Pop Princesses and actresses come out alright. These tend to be the smarter, more driven, and more lucky (in that they have functional families looking out for them). But far too many end up with serious problems for Disney to be entirely comfortable.
It's hard to fathom the thinking of Disney execs who while not directly controlling the Teen Choice Awards, certainly have a say in how their principal star acts, allowed negative images to be created. In the age of cell phone cameras, any negative image (and audio, as Michael Richards found out) will be publicized. There simply is not any hiding any more. Cyrus may be their biggest star, and best earner, but the danger in hard economic times is that parents will simply pull the plug on cable TV (and thus, earnings for Nickelodeon which still gets the bulk of its revenue from subscriber fees). Moreover, parents can cut back or simply eliminate Disney purchases for tweens. Which are, at their core, discretionary spending.
It's possible, that Disney execs either did not wish to alienate Cyrus's management, or deliberately encouraged or at least said nothing to discourage, Cyrus from adopting an "overly sexy" performance in an attempt to prolong her earnings power by appealing to older girls, who would as 14-16 year olds find the more solidly adolescent Cyrus a more appealing figure. This would be likely if the launch of new "replacement stars" Lovato and Gomez came up duds.
If this was the case, and it might not be, then Disney execs would be incapable of seeing the danger. The sky-high earnings and popularity of Cyrus guarantee that any possible mis-step will be reported in the press. Probably the video and particularly that of nine year old Noah Cyrus playing around with her friends on the stripper pole in a party aimed at kids and early teens are incendiary for parents. Parents, as a general rule, do not like at all sexualization of children, and negative role models for girls particularly when the words "stripper pole" are involved. Disney was lucky to sweep Jamie Lynn Spears pregnancy (whoever the father) into the memory hole, in good times when parents did not quibble over spending $100 a ticket for Miley Cyrus concerts if it made their 10 year old daughter happy.
Those good times are gone, unlikely to come back, and even if they do, spending habits are likely to be permanently changed (in favor of thrift). Chris Rock had a reputedly hilarious routine about keeping his daughter off the stripper pole. Anger at inappropriate sexualization (aimed at, after all, girls eight to twelve) coupled with discretionary spending at the minimum, means parents have much less slack they will allow companies like Disney.
Any of the explanations are disturbing: Disney seeking to extend Cyrus's run as a money-maker by appealing to older girls with a "sexy" image ala "Gossip Girl," execs fearful of alienating the star and her family/management, or execs simply clueless and unaware of the changing morality caused by hard times. Whatever the reason, Disney seems as unable to chart a course in the recession as any other media company, disturbing since allegedly Disney was one of the better run companies, with savvier executives.
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