As a certain character once said, a James Bond movie is only as good as the villain. The same rule actually applies to just about any story with some kind of confrontation, with the best of such stories having villains which you even want to relate to.
Kung Fu Panda trilogy is no exception. One of the reasons behind the first film's excellence was Tai Lung, a character so intense, conflicted and deeply rooted in the history of the KFP universe, that his story managed to combine the vibes of two great confrontations: Obi-Wan vs Darth Vader and Darth Vader vs Luke. So it's no wonder that my greatest wish for every next KFP movie was to have him back somehow. Those vain hopes...
The villain's complexity became the foundation on which the rest of the story could develop. Including the main character. First film's Po was so great because he was a classic "loser with a dream" type of character: confined in his bleak reality but refusing to accept his destiny. Po's power was in finally letting himself pursue the dream he's been having on his own for so long, and in how a true dream can overcome any obstacle in its way.
The problems began when Po was raised to the supreme position. It's where the pursuit of a dream was replaced with a job. Po is not a leader, he's not even a hero, he's just a guy who does what he can because his heart tells him so. But letting him keep that spirit would mean losing pace for the franchise. So each next film was basically creating a new villain out of thin air (or, in this film's case, from the other world, literally) and imposing the duty of defeating him on Po, using it as a justification for granting him another magic ability.
The gods are what we create ourselves. And, at the end of the day, KFP3 finished creating a cult of the Dragon Warrior by transforming Po from a goofus with a heart and spirit into some kind of omnipotent golden Buddha, smiling and just-be-yourself-preaching. The complexity is gone, the humanity, with all its inherent flaws, is gone. The only thing that's left is the divine perfection and invulnerability. Maybe the kids will love such glossy happy ending, just like they love playing video games in god mode: easy win, plain and simple. But for someone more mature, that kind of easy is just boring.
