I absolutely think it could blow up in a bad way. Either way, the production is asking for trouble just making a show/movie with Michael Jackson.
My biggest issue is the actor himself. Joseph Fiennes? He'll always be Shakespeare to me, and there's no confusing him and Michael Jackson. Just strange--it's like casting Salma Hayek as Eleanor Roosevelt.
I had not even stopped to think about the fit because of the insensitivity issue. However, you are right. Strictly from an acting perspective seems like an odd fit.