I'm not sure if you could call the SHV 20905, which is what I think you are referring to, a matter converter.
In the TRON script (and movie), Walter Gibbs explains the process of Digitization as working like this:
Not disintegrating, Alan -- digitizing.
While the laser is dismantling the
molecular structure of the object,
the computer maps out a holographic
model of it. The molecules themselves
are suspended in the laser beam. Then
the computer reads the model back out,
the molecules go back into place, and...
Pulled from Here
The following assumes that the laser located in the basement of Flynn's arcade is the same or functions the same as the one in the original TRON film.
The molecules being "suspended" in the laser beam would mean that when a person is digitized, the matter that comprises them isn't converted into energy. and vice versa. Instead, when a person is un-digitized, the molecules that are already suspended in the laser are what is used to reconstruct the person. If the matter was created using energy, there would be no reason to "store" their atoms.
Following this line of logic, matter would have been needed to have been somehow pre-loaded into the laser, and it would have had to have been a VERY large amount. Perhaps if Clu had succeeded in sending his carrier ship and army through the portal, they simply would not have been able to materialize (As a side note, there would not have been room in Flynn's arcade basement to materialize all that anyway).
Obviously this doesn't make much sense, since this means that the entire mass of the user would have to be suspended in the laser, and I'm not sure if matter can be held up against the force of gravity by light alone. Also, the molecules would have to be compacted to physically fit inside the beam of light projected by the laser, which sounds very complicated.
The convenient way to make sense of this is to say that the laser operates on some technology we don't yet have or understand, or that this aspect of the story wasn't completely thought out by Lisberger.