He has pissed off everyone who grew up with Star Wars by putting such a fucked up character into the movie.
He's raking in the dollars with it, but he is going to kill his enterprise if he doesn't kill Jar Jar first.
The second movie would generate huge revenues if JarJar died, since everyone would want to see it, but that move wouldn't work. Too many would be pissed off. (like Jar Jar didn't piss off enough already.)
He could just say Jar Jar decides to stay on Naboo, or goes elsewhere and is never mentioned again, and that should appease everyone to a degree. Why doesn't Lucas do this?
He doesn't see that the entire Star Wars franchise can fizzle out if all the old fans stop buying stuff, and he'll lose about half of his entire consumer audience.
The remaining half puts SW at the level of every other movie enterprise, and won't make anywhere near as much as it did around the re-release of the first three films.
If money is any motivator, Lucas should drop Jar Jar immediately.
If dignity is any motivator, Lucas should drop Jar Jar immediately.
If just being a decent friggin' human being is any motivator, Lucas should drop Jar Jar immediately, but he's insisting on not doing that.
I guess that proves he's either a complete moron, or hasn't seen the opinion of his old fans. Either way, he's screwed.

(BTW, please visit my page and show your support by helping me make money to continue trying to make our voices heard by Lucas. We may yet be able to convince him to remove Jar Jar.)