I stopped following the series seriously after KHII. Once I saw the 'secret' video, I knew that there were going to be endless backstory or new stories and stuff like that. All these new prequels and pov's don't really feel like they're building on the original story. Like any other monstrously popular franchise, they are going to milk it for all it's worth and put out game after game, and remakes for the newer platforms.
That being said...I still played Birth by Sleep and Dream Drop Distance. These two weren't horrible games, it's just frustrating to know that the conclusion isn't in sight at all, and that so many new things have been added and twisty new developments that would open doors to new backstory or prequels (I still don't know what's going on!).
As to KHIII...Well, I can't be sure but I heard a rumor that there was going to be a second BBS
Spoiler Alert! Click to show or hide
(it was also hinted at the end of DDD, from my interpretation of the message, but I could be wrong)
, although how they're going to pull that off is beyond me.