Joe, I know what you mean but there's two things I have to say:
1. Don't be too surprised. The late Tomoyuki Tanaka was probably the main reason this didn't happen until now. Had Tanaka still been alive, this new G-film probably would never see the light of day.
2. I didn't think "Godzilla vs. Hedorah" was all that horrible. Its very campy, and very odd, and I personally thought it was a breath of fresh air in the series. Seeing Godzilla fly is not nearly as goofy as seeing him slide on his tail in "Godzilla vs. Megalon."
3. Yoshimitsu Banno was believed to have been banned from making more movies for Toho at the time because of "Godzilla vs. Hedorah." This is not entirely true as I found out in an interview with Banno in issue #73 of G-Fan Magazine.
Producer Tomoyuki Tanaka was ill at the time and not around to fully keep an eye on things, so when it came time to film the final chase between Godzilla and Hedorah, they shot two different scenes: One in which Godzilla RAN after Hedorah and caught the Smog Monster, and the flying sequence that we're all familiar with. The producer that temporarily took Tanaka's place liked the idea of Godzilla flying and the rest as they say, is history. Tanaka didn't see the final product until he was finally let out of the hospital and wasn't very enthused with the strangeness of Banno's Godzilla film. To quote Banno from this very interesting interview:
When Mr. Tanaka saw the completed movie, it wasn't that he got overly mad about it. He didn't blow up, but he said, "Well, I guess there's no way we can change that, huh?" That was his reaction.
Banno also further shows us that Tomoyuki Tanaka wasn't exactly a fan of "Godzilla vs. Hedorah:"
Before Mr. Tanaka went into the hospital, while we were filming the go-go scenes, the dancers had fish heads in the scene, and Mr. Tanaka came to look at it, but he said nothing and went home! In the back of Mr Tanaka's mind, he was probably thinking, "If I let Mr. Banno make another movie, it'd probably be very dangerous what he decides to make! So I'm not going to let him make anything else!"
However, Banno was not banned or blacklisted at Toho as he worked (and still works) for the company after all these years. During his post "Godzilla" career he's done a lot of work an documentaries, expos, and other Toho projects. I guess you could say his career's come full circle, now that he's making a new "Godzilla vs. Hedorah" type movie.
I too have my reservations Joe, and hope that this won't be another lousy entry into the series. But truthfully, even if it sucks, I'll still love it. True Godzilla fans have to love that bad films, just as much as the good ones.