I didn't like it back then, I still don't like it now. It is a textbook case on how not to adapt a game to a movie. It and the Double Dragon movie. Eewww.
I think Mario would've been a HARD thing to do live-action, period. Probably still is today. Unless it was a cartoon movie or a CG movie(where basically the more modern CG depictions of Mario, Bowser, Princess Peach and crew can frolic in a beautiful Mushroom Kingdom in Pixar/Dreamworks-esque quality). Live action, I just can't see it being done justice. Back then, they were given slightly more leeway given the "offbeat" trend, though it was still panned. Nowadays, with the amount of cynicism and pure love for things more realistic, it just can NEVER happen. NEVER EVER EVER. Though, I actually wouldn't mind a CG movie. Mario, Luigi and Yoshi go on an adventure to rescue Princess Peach from Bowser, shinnanigans ensue. Koopa Kids, pipe hopping, warp zones, climbing vines to cloud land, cool!!
That being said, I think a live-action LoZ game could work. Make it simple in concept, take ideas from fantasies of the past(Legend, Willow, Labyrinth) and modern movies like the LotR trilogy/The Hobbit and Pan's Labyrinth, drench it with some good action, adventure and ambience, and that would kick ass! Imagine something like this but with Link, Ganon(Ganondorf), Zelda and in Hyrule:
Legend Trailer (1985) Update 2011Oddly enough, given some of the themes within Legend, some of it almost seems like inspiration to the first Final Fantasy game(Chaos looks REMARKABLY similar to the Lord of Darkness, as well as the crystal letters turning in the trailer remind me of the crystals in the FF series).
Double Dragon, now THAT is a movie that COULD'VE been done right. Especially considering various martial arts/action movies to fall back on. It basically could've been part The Last Dragon, part The Warriors, part Big Trouble in Little China and part(insert any Bruce Lee movie here). It could've been a GREAT freakin action martial arts flick. Instead, it's almost like they were aiming to make it to cater to the Power Rangers crowd. Oddly enough, that one area where all the kids would hang out reminded me of a "lite" version of the hoodlum paradise place in the first TMNT movie(where all the "bad" teens would hang out, then get called in to listen to Shredder's "words of wisdom", or go train as foot soldiers).