It basically comes down to the climate of the movie industry folks. Not knowing the product plays little into the final decision.
For starters: the Xena film was pitched "as a female action hero in ancient greece" not exactly your opening weekend winner at the box office material.
Secondly, it's a genre film. If this was 2001 and riding on the heals of "Gladiator" it probably wouldn't have gotten a second thought. It would have been rushed into production.
Thirdly, largely a female cast. Not going to work, given the recent trend at the box office. In fact, it usually always been the trend.
Fourthly, TV shows to feature films always lose a bit of something in that transition process from small to big. You lose something. Take a look at 'Firefly.' It had a huge cult following when it was on TV. But when it transitioned to film, it failed. Why? Because the general movie going audience wasn't impressed.
"Serenity" (the 'Firefly' film) costed around $40 million to make. Domestically, it made about $25 million. The foreign release captured about $13 million. Its total box office receipts was $38.9 million. It was a box office failure.
The Star Trek franchise, being the exception here. But that franchise had it's bad films.
In order for a movie to be considered successful, it has to earn at least 3 times the actual production cost. So, if a film costs $100 million to make, it would have to make at least $300 million to be considered a box office hit.
When you crunch the numbers, financially speaking, there's no market for it. No amount of letters is going to change that.
For the record, if Rob and Universal were 'truly' interested in the sales of the DVD, the man should call up Anchor Bay Entertainment and find out exactly how many units they sold to retailers/third party distributors (Rentrak/Ingram) and how many were actually sold by retailers and how many units were BSI (Back Stock Inventoty) returns. They were the ones who actually "distributed" the DVDs. Davis-Anderson did all the work on the production of them (the transfer, the extras, etc).
Oh well. I wonder how that meeting went...