Taking a break is where the problem lies. If KOTOR 3 were to be released thousands and thousands of players will unsubscribe (temporarily or not) to play KOTOR 3. Which could continue for months on end (given that different people will buy the game at different times) if not longer - which could potentially harming player experience. And while they may come back but that's still money lost.
I really don't see that happening.. I mean yeah I have no doubt it would be a good game but there's no way the game would have as much content as SWTOR. People might take a break to play but unsubscribing to play a game they could finish in a few days?? I doubt it.
Then again you've got to balance that out with the fact that KOTOR 3 itself will generate a profit (though some of that will go to Obsidian) and may encourage new gamers to play SWTOR.
I guess it is a possibility, but BioWare would have to weigh up the pros and cons.