I disagree. TSL did just fine. DS Revan's Sith army turn on each other and get chewed up and spat out by the Star Forge, so either way Obsidian made way for their story. Hell, if anything, Obsidian could have done without the Bastila and Carth cameos. Bastila could have been killed in KotOR and even if she wasn't, she's either in hiding or off searching for Revan. The player doesn't need to know that, though.
There was no need to make Carth an admiral either, but since he couldn't die if Revan is light side, then that's okay. I think the player should have had a say on whether Bastila lived or died before seeing her cameo and if the player decides she's alive, only has a small, limited role.
She had no relevance to the plot and neither did anything else Revan did in the game apart from whether he/she chose the light or dark side. What Obsidian did with TSL was rather brilliant.
They added more detail and content to the original KotOR, but made sure that it was ambiguous enough that it did nothing to destabilise what had already happened (or had the potential to happen). It literally gave you the choice of whether your character saved the galaxy or tried to destroy it and even let you choose which gender Revan was.
They could have made a KotOR III that done this for both Revan and the Exile, with any character that could have been killed only playing an ambiguous cameo part. You just create a story that makes it unimportant for the player to know certain things about certain planets and people. Really not hard.
Revan and the Exile could've been war leaders who you never physically see or hear in the game, but receive orders from, from people who are in direct contact with them. Problem solved.