The real problem wasn't trying to tell the saga in two hours, the real problem was the studio taking a hell or high water approach so that X3 would open before Superman Returns.
FOX was livid when Bryan Singer (the director of the first two X-Men films) wanted to do Superman Returns before X3, despite FOX not even announcing X3. They rushed this film out and punished those who were working on Superman. None of the screenwriters of X2 were involved in X3 and what happened to Cyclops character in X3 was because James Marsden was also in Superman, that's why X3 ended the way it did. They also brought in Simon Kinberg (writer of xXx: State of the Union) to co-write the screenplay and Brett Ratner to direct, as people with talent were smart enough to see it as the train wreck it was and bailed from the project (Matthew Vaughn).
After X2 was a big hit, they should have announced X3 and kept the same talent, but they waited too long.
Also, the previous commenter is right about Avi Arad wanting Venom in Spider-Man 3. Raimi has stated many times before that he didn't find the character interesting, but he had to put him in.
This comment was edited on Jun 8, 23:16.