I'm gonna be a contrarian and say that the "SO I HEARD YOU LIKE QUESTS" approach BG 2 took was just fine. Excellent, even. You have to keep in mind those games try to accomplish different things. Or rather, both games accomplish two different things, independent of what they may have attempted: PS:T tells its story and tells it well, using quests to add to it, rather than detract. BG 2 takes a different approach, or rather, it ended up, due to its execution, as a different beast.
Imagine you buy a D&D Adventure book. You know, one of those where there's little bits of text for the DM to read, lots of towns and NPCs and all kinds of neat things scattered around your PCs might or might not find. It's that essence of D&D - the more adventury, hack&slashy, swashbuckly D&D, BG 2 grasps very well. You wander around and find lots of stuff if you want to - or don't. Yes, this worsens the story-telling. But yes, it also strengthens its appeal as a 'P&P simulator' in the "wander around and explore and find loot and meet NPCs and fight battles and crawl dungeons" sense. Keep in mind you can take many approaches to P&P gaming.
You can have story-intensive games of various shades and colors and there are many systems focusing on narrative. Then you can go pure hack and slash. And then there's, of course, a lot of in-between. BG 2 is comfortably in the in-between, perhaps closes to the hack & slash and it does that well. The "everything at once, including the kitchen sink" approach to its quest design can, viewed from the perspective of someone who wants to live out those D&D Adventure books I mentioned, be considered an appealing thing rather than a detractor. It is true that it deprives the story of momentum - but the story, while serviceable, was never the strongest point of BG 2 in the first place. First and foremost were the battles and the dungeoneering and the autism-fueled (and happy days those were) ticking off the quests on your massive list of active quests.
So in the end, I guess, it comes down to what kind of game we want, or they want. Do they want to capture that D&Dy essence of delving into dungeons and exploring many places, doing all kinds of stuff, with the story being there, but more of an excuse to go out and adventure, or do they want to focus on the narrative? I feel that, especially given Obsidian's track record, trying to focus on both is tomfoolery.
So I guess what I am saying is that the BG 2 approach - which, as I have hopefully shown, does indeed have flaws as well as advantages is actually a better style for a game like this - with Exile tackling the PS:T, narrative style instead.
