Its very well possible for a third, since the ending was - I find - very pathetic, it lacked the proper substance to make it great. The game itself was fantastic, one of the top games I've played, but that ending was just b/s and it got me pretty mad.
It will probably end up making a sequel, to be honest, LucasArts seems to focus so much on money, everything is about money. Consider the Star Wars trilogy - it was meant to be a trilogy, but they go off and make sequels, which I must say are pretty bad. They start doing everything digital, making everything less realistic, people complain, they don't care.
Kotor to me, was left unexplained, like:
If they DO make a third, I hope they use Revan and maybe make a fourth with the Exile. To finish there stories, to be honest, I didn't like the ending with Revan, you hardly get to know what happens or what he does, except for the few hints in Kotor 2, but if they let us once again control him, that would be great. If they bring in a third character, I think I'll be disappointed again with the ending, they don't truly explain what happens with Revan/The Exile, which really pisses me off, it leaves gaps, and if they make a third character, more gaps will be opened and the storyline will slowly get screwed. But I've notice, slowly the galaxy seems to be dieing, and Kotor 3, may be the end of it all. But I really can't know until it happens.