I think Lord_of_destruction did a great job of explaining this one.
In my opinion, in relation to the original question, as a kid, my two best MOTU moments were the Christmas Special, and the Movie. Both of those were because kids from Earth, my planet, were brought into the world, able to interact with He-man and his warriors, brought onto Eternia to join the struggle, etc.
As a child, the target audience, that meant it could happen to me. Nothing was more exciting as a kid than seeing my childhood hero interact with us, the ordinary people, and of course us ordinary people being the straw that tipped the balance in the favour of good triumphing over evil.
Nowaday's I don't think it will make much difference as there aren't really any child fans out there, they'll either be new to the story/characters, or us. I.e. adults who used to be child fans!
So whether Earth is involved or not, outside He-man's heritage, I don't think will make much difference. If the character is strong enough to have kids walking out thinking they want to be He-man like we did, then knowing that He-man is half Earthling will be as much of a potential draw as it was back then for aftersales of figures and rejuvenation, etc. But without having the prior excitement of knowing the character, actually having him and the warriors interact with Earthlings or not wont make much difference to pulling people in.