The rumor about the DS movies causing the cancellation of DS is really just speculation. Many fans remember their horrified parents reaction after seeing HODS but the actual ratings numbers don't actual show that huge of a drop...If the timeslot was changed to earlier when the audience was less able to see it, that would be a more likely factor in its sliding audience.
As for NODS causing the cancellation, the negative would have had to tumble down Quentin's 'stairway to time' in order for that to work, since the movie was made and released after the show's cancellation... 
Still, if DS HAD lasted that much longer, it MIGHT have been a factor eventually--- NoDS wasn't GORY by any means, very little fake blood was spilled or harmed during its filming, but it WAS less-than-subtly unpleasant in its sexual themes, and even more nihilistic in its denouement than HoDS....
Since it could have been argued that, like "The Innocents", the supernatural "threat" in NoDS was just as much a figment of the overactive imaginations of inmates of a large, spooky "castle"(which included an artist and two writers of gothic tales), it was a hypothetical tale of a danger that might exist in the "real world" unlike the TV version, whose evil deeds emanated from (mostly) imaginary monsters.
(Yet, at the same time, IMO, it was a better film in some ways, dealing with mature themes, plot and character development.)
Also, the concepts of a David Selby character mistreating a Kate Jackson character, or the fates of those two, AND the Nancy Barrett and John Karlen characters, might have put a damper on the enthusiasm of the series fans, who generally expected SOME kind of hopeful / optimistic resolution of DS storylines (no matter how high the final body count!)
A more cynical movie-goer might even have been excused for feeling a bit used, viz.: "They're using a mostly G-rated daytime series to lure ME into PAYING for the NASTY films they REALLY wanted to do..." Not only THAT, but the fact that all surviving soap operas in the 1970s just plain got sexier and even MORE violent and morally ambiguous, you can just IMAGINE what the "old" DS would have had to do to maintain its viewership into the disco era.
So much for the "kiddy audience", who would likely have been more entranced by "Star Wars", etc. by then, anyway.
Of course, the 1991 DS was considered to be pretty sexy and violent and full of sophisticated special effects, and now it's the Millennium, so the producers of the
newest DS can certainly make it as "bad as they wanna be" if they deem it necessary.
L.
