Okay, just to get this out of the way, that ending gag? I had to fight my gag reflex.
That out of the way, I wholeheartedly agree with the message here. Setting up a game so that it HAS to be turned into a franchise seriously runs the risk of taking what could be a great idea for a standalone game and piledriving it face first into a steaming bucket of dog shit. And yes, this is a business practice that really got off the ground in Hollywood and the games industry following example is akin to watching someone play Russian roulette, see them shoot themselves in the head, then picking up the gun and giving the cylinder a spin yourself.
The absolute best example I can think of here is the "Saw" movie franchise. The first Saw movie, for its time, was very impressive. It was a very clever way of focusing more on the victims than on the killer, making the crisis and threats to the characters very creative and disturbing. The first sequel expanded well on the first movie, extrapolating what came before and explaining a bit more behind the killer's past and making him seem more human, accentuating the flaws in his reasoning but showing he was incapable of admitting his philosophy's drawbacks and faults. The third movie, while not great, brought the killer's reign of terror to an end and saw his death.
And then...the franchise KEPT. GOING. The parade of half-baked, poorly done, torture porn sequels that came after was a stark, unabashed look at Hollywood's unadulterated greed and complete indifference to the quality of its work. The characters were made deliberately unsympathetic so people would have no emotional interest in their survival and could see them dying in slow and sadistic ways without any feelings of discomfort outside of the physical brutality of the spectacle. The main antagonist, long dead and buried, was dragged back through flashbacks over and over, attributing him with absurd degrees of foresight to the point it bordered on him being fucking clairvoyant. Not a single movie ever ended on a sense of any sort of closure; not even the very final movie, which they KNEW wasn't going to have a sequel, they KNEW was planned to be the last installment in the series. Still they couldn't end it with any sense of closure, letting the last of Jigsaw's protege's walk away Scott free in the very same manner as all the other hackneyed and trite installments of the franchise; sequel bait for a movie the film makers and producers never intend to create, but are incapable of resisting the urge to leave the door open for. Those. Fucking. ASSHOLES.
The Saw franchise, past the third installment, in my opinion, was a metaphorical stage light shining full on the mainstream film industry as it loudly said in front of its entire audience "all we care about is taking your money." And the games industry is behaving increasingly like it. How many fucking Halo sequels are we going to get? Master Chief was supposed to have come to the end of his journey in Halo Reach, wasn't he? And then suddenly, boom, he's right back where he started; different planet, sure, but the same old conflict, if I recall. How many increasingly nonsensical installments is Final Fantasy going to get? It's up to 13 now, right? And from what I've heard, the plots aren't getting any more thought provoking, they're just becoming increasingly ridiculous in their made-up words and failure to have a sensible narrative or logical setting. And how many old school gamer's childhood memories are they going to piss all over with what they've done to the Sonic the Hedgehog series? Everything I've heard about any of the 3D installments to the franchise can be summed up as "Oh dear God, what have they done to Sonic THIS time?!"
Much like Jim, I too enjoy and have enjoyed sequels. I LIKE it when a character I enjoy playing as and following their adventures returns with a new challenge to face. But there's a right way to do it and a wrong way. To me, the core of the problem can be summed up in two words: Sequel Baiting. For the love of GOD, stop ending games with an ending stinger that takes all sense of closure and grinds it under a heel. A story can have potential to lead to a sequel without making it fucking obvious. An audience isn't fucking stupid; if a hero conquers an enemy and they end with something akin to "The great threat has finally ended; now we can start to rebuild," anyone past the age of five knows that means more can happen in the future. This chapter is over, but could a new chapter start later? It's a distinct possibility, but there's no loss of the feeling that something has been accomplished.
A good example here would be the ending to Dishonored. Now okay, I realize there were two endings, but assuming one of them (for the sake of argument let's say the good ending) was canon, it brings one chapter to a close and leaves the door open for another. Corvo returns the child empress Emily to the throne; with her trusted bodyguard at her side as advisor and protector, she leads Dunwall from the bring of destruction to an age of hope and opportunity, during which Corvo eventually passes away from natural causes and is buried beside Emily's mother. It's a story that brings the tale of Corvo to an end, but with the empire only just having recovered from a plague and a massive bout of political intrigue and corruption, what happens in the future is really anyone's guess. There is definitely material for a sequel here, but it's not blatantly obvious, so it doesn't wreck the self-contained story of the game.
Why the industry can't follow this example more, I can't imagine.