I don't think that the size of the Corleone empire is really important in whether or not GFIII is a good film.
In GFII the Corleones were an absurdly big enterprise. Even in GF Vito had enormous powers in almost any branch of the US society.
GF3 could have been great. The pope, Michael's family, Sicily, old man Michael, new Mafia Dons, etc.
But they messed it up from the start. In defense of the actors: The script was lousy, I think they just didn't know what to do about it.