I think their options were severely limited by sinking the ship in the first movie.
If they didn't sink it then they could have made 'Titanic 2 Judgement Day' and then 'Titanic 3 Rise of the Machines'

and if there was still any life in it they could have made 'Titanic -Salvation'

and then if any of the audience was still alive they could have made 'Titanic The Kate Winslet Chronicles'

So I suppose having wrecked all the props and main characters in the first movie, the only option left was to make 'Titanic 3D You will never guess the ending'
Where is Arnie Schwarzenegger when you need him?