I'll be honest: I don't care for Nuts & Bolts but I do think the way it turned out made sense...when you realize that the team that Gregg Mayles and his team, who previously made the first two DKC games before they moved on to Banjo, didn't work on DKC3. That was made by a new less experienced team who went on to work on DK64.
Grant Kirkhope touched upon this in an interview:
http://kotaku.com/thanks-to-73-000-supporters-theyre-making-a-successor-1713481654
In hindsight, it actually makes sense to why Banjo-Tooie ended up being so huge and expansive. They wanted it to be their sendoff to the series, in the same way DKC2 was their sendoff to their take on Donkey Kong before moving on.
What's interesting about the development of Banjo-Kazooie is that it initially mirrors that of Donkey Kong. As in, the team comes out with the first game, and then they cap it all off by releasing a second game before jumping on to a new IP. It was Project Dream (which became BK obviously) that proceeded DKC2, and Grabbed by the Ghoulies that proceeded Banjo-Tooie.
Ultimately, I think the reason Gregg Mayles' team ended up crawling back to Banjo was because A.) GOTG was neither a critical or commercial success and B.) unlike with Donkey Kong, there was no B-Team to fill in their shoes to continue working on the series. Thus, the team probably felt like they owed us some sort of Banjo game, so they scrambled many ideas around such as being an enhanced remake of Banjo-Kazooie before they got bored of that idea and it eventually ended up being vehicle based.
So honestly I do kinda believe in Craig's statement on how Rare doesn't like to do traditional sequels. They'd usually do one or two before moving on to something else.
