There is a legitimate problem with too much continuity from an objective standpoint. It could very well work with The Avengers, because the characters need no real introduction, they're cultural icons that most people who grew up some time in the last 30 years should be somewhat familiar with. Most of the people who will go see The Avengers may have seen all the previous films, some of them might have only seen one or two, and some may have seen none of them, and yet most of the people that will go see it will be able to follow what is going on to some degree.
But continuity in general falls victim to something I would call the "Anime Problem" as it pertains to television. It's hard to air anime on television because most people will stumble upon somewhere mid-way through the series and will have no idea what is going on, and the confusion will lead to people tuning it out. Since most anime have some kind of central story, it makes it hard to get a dedicated fanbase on general television. Bad dubs don't help either.
When you think about the most popular TV series, most of them are very episodic in nature, you don't need to see all the preceding episodes to get what's going on in the current one, for the most part. There are notable exceptions like "Lost", but for every one of them you have a completely failed attempt at story-driven drama like NBC's "The Event". It's also why comedies and cop dramas do the best on network television, because the formula lends itself very well to disconnected episodes.
However, we're not talking about television, but movies. Sequels to popular movies usually do garner some amount of success, but don't tend to last into the third and fourth movies because they don't tend to be that great and it just becomes harder to market it over time. But what Bob seems to be talking about here is not so much direct sequels, but mashups of characters from different movies. This has a pitfall as well, take the "The Departed + The Town" example, people who have not seen both movies will not know the main characters, and so Hollywood will feel forced to re-introduce them and re-establish their characters, and at that point why even bother?
Forcing people to watch all your other movies before watching the one being advertised might be an attractive business model, but I don't ultimately feel it will be successful unless the characters themselves are well-known and don't require a lot of background to the character, scenario, or story. Doing it on a small scale (like the Al-Quaeda idea) might work as a creative thing, but won't really draw any more people to the theaters than if they just did things the way they always did them. Bringing two or more separate plot lines together is a hard thing to do for accomplished writers and often goes wrong (as comic books have taught us), and I think Hollywood might take it out for a spin, but it will go wrong and we will go back to the cookie-cutter stuff before too long.
