Okay. Being a fan of the DKC series, let me warn you, what I'm about to say may be considered highly opinionated:
No, infact, I think they did better than Nintendo does. Before Rare got a hold of him, he was just a "stubborn ape" and would have only starred as a villian or made a few guest appearances (not too mention, Kamek would have been in Mario Kart 64 instead of DK. I like Kamek, personally, but not as much as DK). Also, they introduced some new loavable characters, like Diddy Kong and even Lanky Kong. However, I will admit that I like Namco's Donkey Konga (as I even bought it recently, mostly for when DK Bongo Blast get's released though) and I can't really judge Donkey Kong Jungle Beat or DKa2 too much, since I have not played them enough, but I will say that I absolutely hate the toothy grin style of DK.
I know the DK character has had a toothy grin since the first games, but too me, the toothy grin just doesn't look right on Rare's design for DK. He looks like a psychotic freak who's about to beat the crap out of you.
Edit:
I'm holding out hope that if Diddy Kong Racing DS is successful, Nintendo allows Rare to develop Donkey Kong Country 4.
Eh, I don't think that could happen either way. I believe they are only able to create ports of thier older DK games. However, DK King of Swing is pretty much the official sequal to DK64, since it contains elements from the older games.