Wow, 4Kids, cutting this from the film has got to be your worst decision ever. Worse than your Sonic X and One Piece dubbing decisions.
This was dubbed completely; meaning it was fully intended for the final cut, and probably didn't get left on the cutting room floor until near the very end.
This makes the tears of life in the stadium SO MUCH more heart wrenching than it already was. If you had kept this in, you could have kept out that insanely stupid "Winds of Water" monologue that was not in the Japanese version at all, and made absolutely no sense whatsoever.
Hell, even if it was a running time issue (which I highly, highly doubt), you could have sacrificed Pikachu's Vacation even, which ironically has also been cut from all subsequent re-releases.
Oh, but I think we all know why this was cut. You always thought kids were fragile little brats and we can't show them anything even remotely dark.
Note: the first two minutes of this did make it onto the VHS release as a "bonus".