Putting aside the animated Jabba, the difference in the overall look of this scene between the 1997 Special Edition and the 2004 DVD release is pretty striking. What happened with the 2004 release? Was darkening the entire film a deliberate choice? I'm assuming so considering that it wasn't changed for the Blu-ray.
I say YES. Contrary to what we'd been told, not all the VFX travelling mattes (i.e. the square fields surrounding single elements like TIE fighters) were ever removed / fixed. The first thing I did for the OT SE edition on DVD was to increase the brightness to the levels I get from my LaserDiscs and which I remembered from the theaters. But the moment the brightness levels looked right, a lot of these travelling mattes that had been supposedly fixed, had a comeback. In ANH this is most evident upon the Falcon's escape from the Death Star and revisting the space battle from ROJ I noticed many of these, too.
I hadn't actually noticed this before (I will now) it's not something that bothers me particularly but I do agree that there was no need to alter the colors and if I had the choice I'd watch the original versions.