Why was 'The Hobbit'...?

First, as with his other works, Tolkien packed a great deal of action and detail into 300+ pages. Peter Jackson wanted something that remained true to the source material and did not take short cuts, and he certainly earned that right of control based on his success with the LOTR trilogy.

Second, that success made breaking up the story a no brainer for profit-driven studio executives. With a loyal audience and guaranteed ticket sales, more movies means more revenue.

Story had to be darkened and made to match better the LOTR franchise in mood, and as with LOTR, there were massive rewrites to the whole thing. Nothing like the mood in the book.

And yes, probably for the $$

It all comes down to Peter Jackson getting too ambitious with his vision, more to satisfy what he wants to see than the common viewer. Sometimes less is more.

Money

sweeping

For the money, dipshit.