In fact, according to Daniels, his initial response was "Are you crazy?" which does seem an appropriate response to someone who suggests willingly revisiting one of the franchise's biggest stumbles. According to Daniels however, he was won over in the end, realizing that the Lego branding and shorter animated nature of the project meant that it could be taken a bit less seriously: "They're teasing here, they're taking you on adventures you wouldn't normally be able to go on."
It makes sense that he was initially wary, however, as Daniels has long been the authority on how C-3PO is portrayed and what his personality is. In a franchise as big and wide reaching as Star Wars, it's rare to have one character be involved in so much of it, and at this point it's even somewhat unusual for that character to have had only one main actor for so long. Anakin Skywalker, Obi Wan, even Han Solo have all had multiple different actors define their characters at one point or another, so having one consistent voice behind the protocol droid himself has been a source of quiet stability for as long as the franchise has been around. (Fun fact: C-3PO was originally conceived as a used car salesman kind of fast talker, until Daniels put his personal stamp on it.)
Not to mention it's pretty stable employment for the actor, who has voiced C-3PO in video games, TV shows, even theme park rides, all on top of playing the character in ten different Star Wars films. Daniels admits he has become protective of the character, even dictating to J.J. Abrams what he felt the droid would and would not do. It's a love and care that has clearly paid off, and made C-3PO a beloved character for generations to come.
The Lego Star Wars Holiday Special is currently available to stream on Disney+.