(2) They just can't think of anything to add in for a third expansion, but I doubt that that's the case since it seems like they'd think of something as long as there were still money to be made.
Just because they can think of things to put into a third expansion doesn't mean that they SHOULD make that third expansion. There's a point at which a game feels complete, and any new major systems begin to feel tacked on. In WoW you don't get spaceships, but if WoW suddenly announced an expansion where everyone got magical ships that flew through the ether between worlds, it'd seem a little out of place and unnecessary. (See also: Spelljammer.) Sure, some people might love it, but it wouldn't feel like it was completing the core experience.
The original Sins was a very good game, with just a few glaring issues: the weakness of static defenses, the crude diplomacy system, the crude pirate system, etc. Entrenchment and Diplomacy seem to be addressing most of those; while I'd love a Sins: Piracy expansion (turn the Pirates into a real threat, with custom capital ships and less metagamable raiding), I'm not sure it's important enough to justify the time and effort needed to do it well.