Hollywood often gets really bad ideas that turn into horrible movies. If this was a comic book world, I think superheroes would spend most of their time foiling the nefarious schemes of film producers. Alas, this isn't a comic book, and there are no heroes to fly to our rescue. Until now. Thanks to their merger, Pixar has killed Toy Story 3. http://www.chud.com/index.php?type=news&id=5782
It means that Pixar isn't going to allow their movies to become the basis for vomited-up direct to video sequels just for the sake of a few extra bucks.
Essentially, Disney asked them to make a TS3, and Pixar said they wouldn't. Disney said fine, we'll do it without you, and millions of TS fans cried, epecting TS3 to be on par with most of Disney's animated sequels (ie -crap). My understanding is that Pixar originally said no because of the contract. Basically they had X number of films left to make for Disney before it could go free agent, and said that they would do TS3 if it counted as one of those X films. Disney didn't want to lose an original picture (and thus potential new franchise), and insisted that a TS3 be in addition to the films already agreed upon, but Pixar didn't want to prolong its servitude towards Disney. Therefore Disney decided to go ahead without them. Now that the two are together forever, perhaps they can restart the project with Pixar's involvement.