Why was it such a misfit?
So many reasons, so little time. I don't have the special with me, so you get no screenshots, but I don't want it anyway.

Mr. and Mrs. Kringle are poor toymakers in Europe that are squeezed dry by the wicked local tax collector. Even under these dire conditions, Mr. Kringle won't give up on his dream--to make a toy for every single kid in the world. They're eventually evicted from their home and wind up in the North Pole, where they're rescued by elves with nothing else to do.

Mr. Kringle convinces the elves to go into business with him and they build a workshop there, singing many weak songs in the process. The elves eventually induct him into their family, give him magic powers and...somehow the reindeer fit in here, but I forget where.

Why didn't it fit in?
Mistake #1 was that they used flat, cheap, overseas 2-D animation. As everyone's learned by now, stop-motion is THE Christmas animation medium.
Mistake #2 is that there's just nothing in this special worthy of the name "special." None of the songs, dialogue or plot pacing work. There are a few worse examples out there, but overall this is a very forgettable cartoon.
Mistake #3 was that the producer said in an interview that the motive behind The Story of Santa Claus was "there's never really been an origin story yet." He apparently forgot the Rankin/Bass special Santa Claus Is Coming To Town from 25 years prior.

The biggest oversight is that kids didn't--and still don't--want to hear an origin story for Santa. They prefer the simple explanation "he's always been around."