Looks like maybe Disney is having trouble finding a bankable star or a "known" with enough experience for them to feel comfortable trusting such a project to.
But I don't buy for a second that they can't find anyone, period. They should easily be able to find someone who looks the part, can act the role and can sing well enough to make people forget about Emma Watson's lousy singing. Heck, there are several of them in the role in various Broadway/traveling production/s already cast as Aladdin, singing much harder songs and doing fairly difficult choreography seven times a week. Not to mention the people working at Disney as Aladdin, or in various musical shows based on the movie, etc. And I guarantee you there are music schools and performance colleges out there pushing nigh-perfect options at them.