The Star Wars Holiday Special/WMG

The Star Wars Holiday Special is in-universe propaganda.
The Empire created it to torture Rebel sympathizers and make them so annoyed by the Alliance heroes that the Rebels never want to see them again.
 * Some of it was probably also part of the unseen torture that Darth Vader used on Princess Leia in A New Hope, especially the parts with Chewie's family. The scene at the end where she's singing? She is singing, alright...alone in her cell under the influence of whatever that hovering droid injected her with.
 * That would certainly explain her appearance and behavior in the special.
 * Or that it is a weapon designed by the Sith to turn Jedi to the dark side.

Life Day itself was created by the Empire to keep the Rebellion too discombobulated to be effective.

 * Its celebrated with colorful holographic dancers, psychedelic 1970s-style music, and drugs (note the drugged-out look on poor Leia's face). The men were also required to wear thick makeup (as seen on Luke), and those not able to wear the makeup (such as Wookies) had to watch long pointless instructional videos instead. Or porn.
 * The Viewmaster is for porn/The Viewmaster is porn/Wookiees won't have their hair shorn/But the Viewmaster is for porn.
 * Old, decrepit Wookiees get to use the Viewmaster for that — this is a way for The Empire to Squick out anyone and everyone nearby.

The entire thing was just a nightmare that was had by one of the characters.
Because you know, I had a nightmare after watching it!

Imagine the special had come out before VHS tapes or other home recording happened...
Star Wars as a franchise goes along like it normally would, as does for the most part its fandom and expanded universe...but in the 1990s, rumors start to go about in the more hardcore sects of the fandom about a holiday special that supposedly aired in the late 1970s, how apparently it had Bea Arthur and Art Carney in it, and Wookies talking for 20 minutes. But, sadly, no known copies of the special exist, and the only thing people have to go on is testimonials or maybe some still photos.

Can you even imagine how much of a legend the special would become, even moreso than it is now? It would surpass The Day the Clown Cried in reputation as the most horrible film nobody ever saw. Books would be written, documentaries would be made, countless people would spend countless hours of their lives trying to unravel the mystery. Carrie Fisher stating that the drugs blocked out all memory of the production would take on a whole new significance. The cels from the animated segment that were auctioned in our world would go for three times their original price in this world, as would the 45 single pressing for the Jefferson Starship song. People would constantly wait for the day George Lucas either dies, has a change of heart, or slips up on security enough that the original masters of the special get released/leaked, upon which they will pass from hand to hand underground for ludicrous prices.

Then, when somebody has enough of a generous spirit to forego their profits and copy the master onto the Internet for all to see, all of those who spent a decade or two trying to unravel the great mystery that is The Star Wars Holiday Special will inevitably scratch their heads and go "This is what all the fuss is about? This is the animation I spent my kid's college fund on to get a single frame?!"
 * Television shows were still being distributed via 16mm film in the late 70's. It would not be unlikely if an enterprising Stat Wars fan got a hold of a network print and made copies.

The special will NEVER be released.
George Lucas will state so in his will. Not that that will have any legal backing, but they will do so out of respect for the dead.

The special is the true reason why SOPA and PIPA exist.
SOPA and PIPA did not come about as Hollywood's ultimate plot to stop online piracy and copyright infringement forever. It's actually George Luca's ultimate plot to remove the Holiday Special's existence from the internet forever.