Well they had to give it a go because it made sense from a business POV. The salarys of the actors would go through the roof if they renegotiated another 5 or 6 year contract. TNG started with almost 30 million viewers and finished with over 30 million viewers, if they could get 35 million people into the cinema (or 17.5million people see it twice!) they would make nearly $150 million in 1994 money!
In the end 18 million tickets where sold for Generations and 21 million sold for First Contact. (Insurrection 15m, Nemesis.... 7m) so apart from Nemesis it worked out ok for Paramount.