For a found-footage-style movie, there's a definite advantage in using unknowns, because it helps sell the illusion that it's real. A known actor would get in the way of the suspension of disbelief.
The story of Mirror Mirror is in many ways a story about evolution. Its about the evolution of a child into an adult. Its about the evolution of those dwarves into something a little less rock-like, a little more humanoid. Its about the evolution of history, too, from the darkness of the Middle Ages into the light of the Age of Reason.