Her'es the thing, Godzilla in the orignal movie was defeated. albeit at great cost.

The "Oxygen Destroyer" used to kill him caused a great deal of ecological damage and, it's inventor fearing his creations use as a weapon destroyed all of his notes and every sample that wasn't going into the weapon and then deliberately stayed in the targeted area, dying himself, to prevent it from being recreated.

(Which, in the Heisei era continuity, eventually spawned Destroyah)

Though, that is not to say that Gozilla has neve been tied to Ghost Stories: In GMK: Giant Monsters All-Out Attack, the original Godzilla's bones are reanimated and possessed by the ghosts of all the people who died due to Japan's actions during World War II as an instrument of revenge.

Even the three guardian spirits (taking the form of Mothra, King Ghidora, and third monster who is really minor and forgettable) can't defeat the reanimated Godzilla. Eventually, a bomb is placed in his body blowing him up, but the last shot of the movie is Godzilla's massive heart at the bottom of the ocean still beating, indicating that the destruction of Godzilla did not banish, destroy, or lay to rest the vengeful spirits and that all they've done is buy time.