Literally just finished the game and having read the first two pages I pretty much share general disappointment with the story - but a huge well done is in order to Yu and his team for S3.
Overall, there's no doubt a lot of love went into S3. It took me just over a week to finish playing at a slow, laid back pace to take in everything it had to offer. I also found combat much more engaging rather than the first two games where 11/12 year old me could play through it all by just button mashing/spamming kicks. The areas were both absolutely gorgeous as well, with new, interesting characters.
Gripes though as already mentioned are the following:
1) Two locations, same mission.
It becomes apparent as you fight the Red Snakes that you literally do the same thing in Niaowu as you did in Bailu. Fight enemies, get beat, go to a wise master to learn a special move, buy an item for X yuan, fight the mob boss, done.
2) The lack of a strong villain.
I still think the most memorable villains for me are Do Niu and Yuan from S2. You met them relatively early in Kowloon and have run-ins that allows their characters to grow, making them and the Yellowheads feel like a serious bunch of bad dudes. Throughout S3 I was waiting for Niao Sun to appear along a similar vein, but it never happened. I can't identify a significant villain with S3 like I can with Chai in S1 or Do Niu/Yuan in S2.
3) The story simply runs out of steam.
Tonight I raised the 5k yuan for the move, got the boat trip and headed over to the palace. Not long later I've beaten the game. Niao Sun feels like she is shoe-horned in and I didn't really feel like Mr Yuan adds anything substantial to the plot like Yuanda Zhu did. I don't feel like any questions I had were answered and the story just... stalled.
4) The forklift didn't have a honky horn.
If a S4 is to happen I hope there is more substance to the story more than anything, because that's the strength of the original two that kept me hoping for the third.