Lucasarts determines who would make KOTOR3, and they just never decided to make anymore. Bioware and Obsidian had no say in making the games. Bioware was already planning a MMO when Lucasarts came to them and asked for them to make a new Star Wars MMO. They in turn decided to set this new project in the KOTOR setting.
Oh, I know. I'm just an Obsidian fan boy.