how come a bigger studio didn't get the rights and produce a motu film ?

Probably ripe for a new version. Particularly as the original movie is hardly held in high regard.

I actually watched the original last week, first time in about 20 years. Not terrible but cheesy and a bit silly. It was the 80s vibe above all that appealed most.

I think it fell foul of Cannons financial woes at the time and had its budget cut.

The He-man audience wasn't that huge at the time. It was coming out a bit too late to capitalize on the cartoon's success, the cartoon ended two years before the film was made, by the time the film in production the toy sales had drop drastically, when the film came out the He-Man craze was ending.