Here's my 2 cents on the Shrek franchise:
Shrek: The first Shrek was actually pretty good, IMO. A twist on the traditional fairy tale and a direct thumbing at the nose at the Disney fairy tale genre, with some clever jokes and sly adult humor, culminating in a quirky rendition of The Monkees' "I'm a Believer" at the end. (Unfortunately, this "hip" musical number ending has since been used and re-used by Hollywood animators in numerous other animated movies.) But the first Shrek had an original story, and told it well.
Shrek 2: Here's where the trouble began. The original Shrek was meant to be a single stand-alone story and was not intended to have a sequel. The producers openly admitted this and that money was the chief motivating factor for them producing a 2nd Shrek feature. When the Suits get dollar signs in their eyes, it can be both a blessing and a curse, with the inevitable slew of video games, toys, board games, T-shirts, breakfast cereal and all sorts of other merchandise coming at us from out the wazoo. Having said that, Shrek 2 wasn't a bad movie, but it reeked of "We're only in it for the money now!", and the fact that the original story didn't warrant a sequel unfortunately rang through in just about every scene.
By the time Dreamworks got to Shrek 3 and the Shrek Christmas special, the franchise had become the very thing it was originally made to parody: a toyetic manufactured cash-cow. There's something to be said when my own father, who loved the first movie, said that the bit with Donkey and Puss in Boots boogeying down to Sly Stone's "I Wanna Thank You For Lettin' Me Be Mice Elf" over the end credits was the only good part of the movie.
Is this the case with all of Dremworks movies? No, but the Shrek franchise is a prime example of what can go very, very wrong with an animated movie, and Dreamworks is just a tad more quick to pump out sequels than Disney, Pixar, Fox and other studios.