I never thought about the sharptooth stalking Littlefoot for damaging his eye. That is an interesting idea.
There is one land before time book which suggests this. According to that book sharptooth lost one eye when he followed chased Littlefoot through the thorny thicket.
There is a scene in the movie which really looks like something happened to the eye and in many of the later scenes it looks like the eye is closed (while in some other scenes both eyes seem to be intact). It is not unlikely that Don Bluth had such an idea in mind, as he had a problem seeing sharptooth following his instincts and nature's law as a true villain. Maybe Mr. Bluth did think of revengefulness as an evil trait to be ascribed to the sharptooth. Also we know that many sharptooth scenes which were considered too scary were cut from the movie. Perhaps (this is only a guess) there might be something more explicit about his eye in it.
As for the sharptooth being a thread to the Great Valley, it is the sequels which suggest that he wouldn't be a thread. In the sequels we have the Valley dinosaurs of all kinds team up against even two sharpteeth invading the Great Valley (LBT 2) and defeating them unscratched.
The end of the original movie does not suggest such a "team work" between the different kinds in the Great Valley. They stand apart from each other in the final scenes. In general the original movie's sharptooth seemed to be more of a thread than most of the sequel sharpteeth. On the other hand we saw the havoc one sharptooth of old was about to cause in LBT 6 before the lone dinosaur turned up. We also saw the stampede and panic which the mere rumor of a sharptooth's presence caused in LBT 7 (when Ducky was abducted).
So in spite of what most sequels show I think that the sharptooth, while unable to ruin the Valley for the dinosaurs, could still make it a much less habitable place for them. I mean would you enjoy living in a place where you might be killed and eaten whenever you are hanging around with some great, strong, big, scary guys too keep of the even scarier guy
The very same book which suggests the story about sharptooth's eye also suggests that he really was a potential thread to the Great Valley. I don't have the book at hand right now, but once I do I can check for the lines concering this (though they might not be too illuminating as of course they are not about the situation in the Valley itself).