I think the worst sequel Square has pumped out is "Advent Children".
I know many would say FFX-2 is the worst considering the tone and fan service (I agree they could have been tone down), but the gameplay was great, I really liked the job system and the story was a great change of pace from all the melodrama seen in X.
"Advent Children" was a glorified fan fic. You have these new villains who barely try to be menacing, fantastical battles and Cloud still being emo and mourning over the same girl two years after the events in the first game.
It was a virtual stunner, that's for sure. But the story was terrible.