Oh yes agreed. I think even Graham Annable said in his interview that the longer you keep the Hidden People around the more they lose their mystery and the more futile it is to try and preserve the sense of fear/dread.
I also think the story got a little too cliche because it was appended to the previous game rather than being a continuous flow or story, so the writing couldn't be as tight. It's like adding a sequel to a movie there was supposed to be no sequel for. Not that I'm sure this is what happened but it's what it felt like.
"Hah! It's like we don't even have feelings. Now pardon me while I recline in my huge executive chair and guffaw, cigar in-hand. "
"ill just go with what Winslow always when something that funny about a location in monkey island is said"