One person reminds me that Mineral King would have been the world's first LBE, so the idea actually started with Walt. He's right.
Another reader gives this background on the closure of DQ-Chicago:
As Chicago-area residents, my family went annually to the Chicago DisneyQuest. It served as our “Mickey fix” until our next trip to WDW and we loved DQ. However, from its opening, Disney never got behind it. There was virtually no advertising. Few people knew it existed. At the time, we had two friends who handled convention goers and told us that the marketing staff at DisneyQuest refused to work with them when they wanted to arrange special evenings for their conventioneers. Another friend routinely has 100 or more sales people in town per week. He received similar treatment from Disney. No marketing efforts were made to schools that send busloads of children to Great America. In short, DisneyQuest was a marketing disaster. We have always assumed that Eisner wanted it to fail because there is always plenty of Disney advertising for things they want to succeed. (If we see the $1600 WDW vacation ad one more time, we’re going to scream.)
As a bit of trivia, DisneyQuest was open during the Cows on Parade festival in Chicago. (http://newyork.cowparade.com/cowsonparadechicago/Album1.htm ) Originally titled “Virtual Cow”, it featured the Mickey icon on a cow wearing virtual reality headgear. By the time we saw it, the headgear was gone and the cow merely sported the icon. We’ve always wondered what happened to the Disney cow that stood outside DisneyQuest. Some of the 300+ cows were auctioned off for charity however Disney owned its cow and it disappeared. Chicagoans still talk about that cow and I’ve often wondered why they didn’t put it in the Disney store on Michigan Avenue after they closed DisneyQuest. I guess that would make too much sense.