Actually, sauropods had by far the lowest brain to body ratio among dinosaurs.
But you are right about stegosaurus being the pop culture icon of dinosaur stupidity. In the 1980s, the popular notion of dinosaurs was still that of stupid, cold-blooded naked reptiles, and the scientific findings from the Dinosaur Renaissance had still not penetrated the popular conscience at the time.
The Land Before Time, although presenting the most modern view of dinosaurs of any movie up to that point, still contained some outdated notions, like the upfront stance of dinosaurs or the aquatic nature of hadrosaurs.
But also, in my opinion, some things were presented the way they were not because the film makers didn't do their research, but to cater to public notions of the dinosaur age on purpose, perhaps even to satyrize it. That's why they included the dimetrodon, the volcanic landscape and stegosaurs as a particulary dumb kind of dinosaur. They could have known this was stereotypical or non-sense, but they choose to put it in anyway, to please the public or to make fun of its ignorance.
In the 1990s, Jurassic Park exploded in popularity, and modern notions about dinosaurs slowly started entering public conscience. By the time The Big Freeze was made, the notion of the extraordinary stupidity of stegosaurs was already fading away, and it wouldn't have made sense for the animators to include it in the movie. Not to mention it might be interpreted as speciesm, especially since in two prior movies a tyrannosaur became a close friend of the Gang, so the presentations of "racism" of the original was viewed as inappropriate at an early date already.
