Well, I enjoyed the first two Dead Space Games, haven't had a chance to play the third.
My daughter has though, and states it's just as good as the prior two.
I think one thing that may have hurt the sales was that some prior games with co-op have been regarded as poor (RE5 for example), and it was assumed that if you were going to play alone, you had to be lumbered with an AI co-op partner, which isn't the case.
But, if the franchise is at an end, where does this leave survival horror? RE has been criticised for being an action-shooter rather than horror, though all they really did was introduce more realistic mechanics. I don't know many people who if a guy with a chainsaw was coming at them would stand still to reload! Dead Island didn't really live up to it's potential, the premise could have been truly awesome. Hopefully Dead Island 2 will bring something new to the table.