I've not seen the work in question, obviously, so this paragraph is full of speculation. However, what this really reflects is Hollywood's neglect of publishing's editorial process. What Hollywood calls "film editing" is only part of the editing process; instead, "film editing" is an artifact of the way films are made. By analogy, film editing is the process of cobbling together a completed draft in a word processor if authors still chiselled their drafts on stone tablets. Of course, that's not to say that the producer is right in this instance, or that the director is; contrast Apocalypse Now! (the studio's shorter cut is more intense, more focussed, and frankly more disturbing) with a contemporary, underrated film (there's noplace to cut in the theatrical release that would not weaken the film).
This, in turn, implicates one of the copyright conundrums related to film: Who is a film's author? Under copyright law and "industry tradition," the "author" of a film that is, the person/entity who has the right to control derivative works made from the film is the producer. Contrariwise, some egotistical French publicity-seeking directors put forth "auteur theory" a few decades back, proclaiming that the director is the author of the film. Frankly, both of them are so wrong it's ridiculous. As William Goldman who has worked on more than a few films explains:
As I've said before and please believe me, it's true (and if you don't believe me, ask anybody in the business for verification) movies are a group endeavor. Basically, there are seven of us who are crucial to a film, and we all seven have to be at our best if the movie's going to have a shot at quality. Listed alphabetically: the actor[s,] the cameraman[,] the director[,] the editor[,] the producer[,] the production designer[, and] the writer....
To elevate any single element in a film is simply silly and wrong. We all contribute, we are all at each other's mercy. To say that anyone is the "author" of a film is demeaning to the rest of us.
William Goldman, Adventures in the Screen Trade: A Personal View of Hollywood and Screenwriting 10203 (1983) (emphasis in original).
In terms of process, though, what the (possibly nothing more than a publicity stunt) teapot tempest brewing over Taymor's film implicates is a failure at a very early stage of the editorial process. A film that is a half-hour long almost certainly has a script that is a half-hour long and, if there's one thing that Hollywood has demonstrated in the last century, it is that the film-production system as it stands pays too little attention to the fit among script, story, and resources. In short, better consideration of how the script itself was structured and executed, and the implications for filming it, might very well have short-circuited this entire argument. Of course, that would require raising the prestige, value, and compensation of scriptwriters, which isn't going to happen any time soon. Too, it would require that the Copyright Act recognize that film is a collaborative effort and reject treatment of the "parts" of a film as works for hire... and that's even less likely to happen. This argument isn't going to disappear so long as there is legal imprimatur for a single-author theory of film; the argument is only going to be who gets to be that single author.