Just because the movie is set in 1999 does not make it canon with the Heisei or Millennium films. Destroy All Monsters is part of the Showa canon and is chronologically the last film of that series.
Besides, there isn't even a "Millennium canon." Every film, except the Kiryu Saga, is standalone and not part of any other continuity. Heck, Godzilla 2000 is (presumably) set in 1999 as is the opening of Godzilla Against Mechagodzilla, and neither of those films are connected.
"When man falls into conflict with nature, monsters are born." - Professor Hayashida, The Return of Godzilla