I'm not sure if I agree with your reasoning that putting people in costumes means disdain for actors. That would mean indicting Peter Jackson for his work on Lord of the Rings, which put many people in costumes as well.
I think it's rather that Lucas communicated very poorly with them, as well as probably lacking empathy or understanding about what actors do and how they go about doing it. I get the feeling that Lucas just really isn't much of a people person, which possibly leads to problems when trying to direct actors or writing meaningful human drama.
Beside which, I'd take issue with the notion that a wonderful character can't be created without a human body or face being seen on screen. Would Darth Vader have been quite so memorable if his face hadn't been hidden behind that terrifying-looking mask? And consider how incredible a performance Anthony Daniels gave as C3P0 even while wearing a restrictive costume and a face that displayed no emotion at all. Chewbacca is a sidekick, yet is a beloved character even though he's never spoken a single intelligible line of dialogue and has no obvious human traits at all.
Even the world of CGI has seen breakout characters and performances, such as Andy Serkis's portrayal of Gollum in Lord of the Rings. His work was instrumental in helping filmmakers to understand that digital performance capture and voice work can be every bit as important as animation in helping to bring a CGI character to life.