What a fascinating idea.
There's not a doubt in my mind that it could be done, and I'd wager that its look would be a lot closer to the source material. Heaven knows it would make things much more expedient with regards to Dr. Manhattan, Rorschach's mask, Archie, Bubastis, etc.
However, we still run into the basic problem of runtime. Even with an animated feature, there are certain vital story beats and thematic points that would have to be cut. I should hope that the squid would be able to make it into an animated feature, but who the fuck are we kidding? In retrospect, looking at the previous script drafts and what we know about the finished movie, there was never any chance that the squid was ever going to make it to the big screen. For whatever reason, no one wanted to touch the damn thing.
Yet all of this is beside the main reason why Watchmen was never going to be animated: Because in the minds of Hollywood execs and mainstream audiences, "animation" still equals "kids' movie." No matter how much South Park we have to prove that the medium can be adult, there's no way any studio would greenlight an animated film of this magnitude unless it could be made kid-friendly.
"We've got this comic book, it's one of the greatest in the medium, and it's about a bunch of superheroes. Fans have been begging for a great adaptation, and we could do it animated."
"An animated superhero movie? The kids'll love it!"
"Great, now let's talk about the Hooded Justice/Silk Spectre rape scene."
"...Wait a minute."
_________________
This is truly a madhouse. And I'm the lunatic running it. I've spent three years wondering if I should be proud or ashamed.
