It's simple: the marketing department took over and the focus was on selling jar jar dolls rather than telling a story. They should have just watched the original movies and matched up the continuity for the prequels.

the problem with episode VII is that marketing is still in charge of the movie (ever wonder why they had khan in STID?), and I'm afraid there'll be even more focus on selling toys (We are talking about Disney here) and making the films broad enough to bring in a larger audience. Abrams isn't going to bring "balance back to the force" guys; the only thing he can do is stop the films from being worse than the prequels, which might be easier said than done (eg. Man of Steel).