So basically, it plays sort of like Final Fantasy XII, except that it actually aims to be an MMO and has a monthly fee?
I loved FFXII, but I have to say that this is kind of a bad idea. :/
Honestly though, they could still make KotOR III by setting it either shortly after KotOR II or at the lead-up to and/or during the Great Galactic War, prior to the Treaty of Coruscant. I don't see it being hard...
*Sigh.* But then, the Great Galactic War era is already too well-documented at this point to offer any real mystery, isn't it?