Well... Cars and Shrek are huge merchandising money makers. Cars 2 was clearly done just to sell die cast cars, as the first one had large scale sell outs of small cars in the first month. Shrek, because Dreamworks wanted some sort of Franchise. I actually really liked the second over the first, but it really didn't need a third or fourth... though the Third comes off the worst of the bunch, IMO. Dragon... well, that's a book series, but you can tell they aren't using book stories for the second movie... they rarely do. I have HUGE faith in Monster University, but really want a second Incredibles (though I don't know how they could top themselves, they are considering it when Brad Bird comes up with an idea he feels is worthy).And you're right, Happy Feet didn't need a sequel. Neither did Cars or Shrek (and neither does Monsters, Inc., How To Train Your Dragon or Cloudy With A Chance of Meatballs). Oh, Hollywood...
Still, it really seemed that Warner Bros wanted to make Happy Feet a franchise picture, and even if it tanked, something tells me they'd try a third. I only saw some of that movie, and it didn't impress me at all... same way I hate jukebox musicals. Loose plot connected to various barely related songs... I really didn't like the look. Even Robin Williams couldn't make me enjoy it, and I's a fan. LOVED him in Robots.
Now THAT is a movie that should have had a sequel. Ice Age nothing.