"The film was originally planned as a low-budget release, with Hackman and Lisa Eichhorn. Streisand's then-agent, Sue Mengers, who was married to the film's director, suggested Barbra for the part instead of Eichhorn. Several biographies suggest that because of the film's subsequent failure at the box office, Streisand fired Mengers."
Based on R6's post, clearly Mengers wasn't as smart as legend would have it.
She didn't want to be associated with someone known to be that crass regarding Sharon Tate.
Sue didn't support Babs in her quest to make Yentl, so she was turfed.
"Don't worry, honey, stars aren't being murdered. Only featured players."
Sue Mengers to worrying Babs post Manson murders
Sue hated Yentl, and advised Babs not to do it. That's why she was fired.
Actually, aside from What's up Doc, Sue never got Barbra a good movie role. I always had the feeling that the ONLY reason Barbra kept her on as long as she did was because they were friends.