It's probably because this version is not the original one, but a rerecording with new lyrics. While the song is great, IMO it suffers from what Susan described as the "destruction" of the song, with loud overdubs of horns, keyboards, drums and guitars which get in the way of what is supposed to be a heartfelt piano ballard.

It's pretty kitschy.

Funny, I find it stylisticall similar to "Adonis & Batsheba", but inferior as a composition. "Adonis & Batsheba" is, of course, the song Susan Rogers hated, while she kept spreading the myth about "Wally" being some sort of an otherwordly, epic piece of music that no one else would ever get to hear. I just don't think there's that much going on in the melody of "Wally" that would suggest any version of it would end up being widely considered one of the best outtakes by the fans (i.e. not comparable to "Moonbeam Levels", "Electric Intercourse", "The Dance Electric" etc.).

As I wrote in the other "Wally" topic, I think that if officially released in 1986-1987 now it would be regarded as one of the lesser song of the era.

A nice little tune, but nothing more.

Discussion here: http://prince.org/msg/7/444843