Well, Boorman
had
just ruined his reputation with the universally panned
Exorcist
sequel…

The Wicker Man which was made in 1973 was made for 500,000 pounds. It had an amazing cast, and a great and creepy story.
Basically in the UK they can make superior productions on smaller budgets. It's the US with $200 million budgets that keep producing trash.

"What he could have done with several more millions?"
For my two cents worth, I'm thinking beyond a certain point of outright penury extra money doesn't make the movie. I remember a story told by Robert Mitchum about director John Huston, who was confronted by a studio exec who told Huston to pad out a movie It might have been
The Red Badge Of Courage
(1951). Huston told Mitchum, "If they want 'em bad [his movies] we can make 'em bad cost a little more of course"
Beyond that, in your comparison of
Krull
and
Excalibur
budgets, a left-field theory is that Orion was a comparatively new production company and making their movies in Britain and the Brits love to save money, rather than Americans who (stereotypically) "love to throw money at a problem."
Krull
's budget was coming from Hollywood old money Columbia, and so maybe it had more money to risk.

Possibly, I just assumed that he might have not been offered enough, as we hear about budget issues during production.
It seems to me, from the time as a teen who watched it in the cinema a few times, and reading about the film since, that Boorman was always struggling to 'make do'?
What he could have done with several more millions?
As it was, Boorman's effort made $35m on a budget of around $11m, whereas the far-inferior fantasy film
Krull
had a budget of $45m and only made $16m??

Did he ask for more budget and was refused? Or did he receive what he asked for? If the budget wasn't huge, but it was what he thought he needed to make his movie, surely it means the budget was big enough. If he wanted more and didn't get it, I don't know; maybe the studios just didn't believe in an Arthurian movie. There were tons of fantasy Z-movies in the late 70s and 80s, maybe the studios thought this was just going to be the same kind of cheap silly fun; maybe they didn't believe enough in the subject matter. Arthurian movies often seem to suffer from that sort of suspicion.
"
Occasionally
I'm callous and strange."