Creator Backlash: The unanticipated workload of an all-marionette feature, attempting to make a studio blockbuster as spontaneously as a South Park episode and the compromises they had to make in order to have total creative control convinced Trey and Matt that they never wanted to make movies ever again.
Doing It for the Art: Sort of. Trey and Matt forfeited their salaries in exchange for complete creative control from Paramount, feeling that they didn't really need the money. The drawback was that they had nothing to look forward to on days when they were particularly burned out.
Throw It In: According to Stone and Parker, they hadn't originally planned to make Matt Damon any smarter or dumber than the rest of the actors guild. However, when his borderline-caveman looking puppet came in, they decided on the spot to make him a drooling idiot, which Matt Damon himself thought was hilarious.
Troubled Production: Trey and Matt legitimately had no idea how difficult an all-marionette action film would be (judging by the source material) and clashed with the puppet-makers when they were told that even the puppetry that was meant to look bad on purpose took a considerable amount of puppeteering expertise and rehearsal that would not allow for the same kind of spontaneous script-changes that would come with making an episode of South Park. As mentioned above, they also forfeited their salaries in favor of complete creative control when Paramount started coming down on them about censorship, making them more apathetic to their already disillusioned vision. The result was Parker and Stone swearing off feature films for the rest of their lives.
Unintentional Period Piece: All of the events that the film mocks were very recent when it was released, and it quickly became so 2004 it hurts.
There seem to be a lot of conflicting stories going around as to what exactly the film's concept began as- some sources say Trey and Matt originally wanted to make an R-rated Thunderbirds movie, or wanted to remake either Armageddon or The Day After Tomorrow with puppets, while leaving the script entirely unchanged. Another story says it was originally written as a sequel to the cult film Megaforce.
Alec Baldwin and Matt Damon thought the movie was hilarious, and said they would've gladly lent their own voices if Matt & Trey had asked. George Clooney, who has done cameo voice work for South Park twice, was actually offended that they didn't make fun of him more. Even U.N. Weapons Inspector Hans Blix (who Kim drops into a Shark Pool) was amused.
Matt Damon was actually supposed to be portrayed as intelligent and articulate, but when Trey and Matt saw that his puppet looked "retarded" they decided to portray him as such.
The deleted scenes and animated storyboards show that the film was supposed to have slightly deeper character development, less subtle racism, and I.N.T.E.L.L.I.G.E.N.C.E. called F.O.N.Z.Y.