The film's banned in Thailand. The main reason for this is that in Thailand they are very protective and supportive of the monarchy, and the film as well as the show took way to many liberties with actual events. Therefor, understandably so they are offended by the movie and it's not welcomed there.
The King and I was a fiction based on real life characters (based on a fiction loosely based off an autobiography). Back then it was causing a lot of confusion and a lot of people would've thought it was historically accurate. A lot of things were actual events but they were very fictionalized (same as the sound of music). Criticizing, talking "bad", or disrespecting royalties in Thailand is a criminal offense. There's a law about that so to avoid any legal problems none of the books, movies (any version even the jodie foster one) or musicals are allowed or brought in. I feel like now people are more accepting because we're more educated about the matters, but it would still cause some stir and gasps here and there so none of the distributors wanted to go through the hassle. I am thai and I saw the show and I thought it was outstanding (definitely artistically accurate than the movie because of today's technologies might have helped with the research) however, if someone actually mount a production in thailand or release any dvds there, a lot of conservatives in Thailand wouldnt be pleased about it.
I more than understand the feelings of the Ghai government and some of the people.
By that token, considering their feelings about the piece, it is the chief reason why I am not REALLY bothered by productions of King & I that do not have racially accurate casting. In SOME ways, that separation makes me feel a tad more comfortable about the property itself... And if handled correctly by the right creatives, could be used to turn the entire show into it's own "Small House of Uncle Thomas."
^ That reminds me of the Kristin Chenoweth interview with Seth Rudetsky where she said she was in a regional production of The King and I where she played Tuptim. After they joked about how racially appropriate that casting was, she said Lady Thiang was played by a Southern African-American woman with a thick Southern accent. Chenoweth gave an impression of it that was pretty hilarious and made me want to see that production despite the inappropriateness of it all because as you said, the story isn't faithful to history or to the real-life figures or Thai culture really.
I don't know if it's still the case, but at one point there were many clips from that young-Chenoweth performance as Tuptim (I think it was at the Lyric Theatre of Oklahoma back when she was still in college, or just barely out of it).