Yeah, Re:coded.
Seriously though, Dissidia was going to be a KH fighter until Disney decided that their characters couldn't fight each other...
which is almost the entirety of the franchise's premise so GG Disney
I would be totally fine with an original-cast-only fighter though. I might even prefer it that way.
The main problem Disney most likely saw was not the complete premise of their characters fighting, but the tournament and beat-em-up style of the proposed title Dissidia has.
For example, I could imagine that Disney (and lots of parents too) would be horrified to see uploaded videos on Youtube where players of "KH: Dissidia" choose to play as Vanitas or Ansem SoD and beat the crap out of Donald, Mickey or Goofy. In the KH series itself, when Disney characters fight, it's almost always either in a cutscene or on
your side.
In a Dissidia-style game however, you can also choose to play as the villains or even when you take one of the good original characters, the possibility that i.e. Mickey or Donald would pop up as an opponent is there, and
that's what Disney most likely can't stand because it would be going against the image those characters have worldwide.
The transcript from Famitsu has been translated, with many thanks to
SQEXGAL!
Reading all this again reminds me how much of a hardworking man Nomura is and how much he is into "his" Kingdom Hearts-series and loves what he's doing.
This passion and dedication is admirable and much of the flak and bitching he gets especially from some parts of the western fanbase is totally uncalled for.
A fun thing to note is that even someone as experienced as Nomura is astounded by the possibilities the PS4 apparently has to offer, which means that we can probably expect KH III to vastly outlast both KH 1 and 2 in terms of both gameplay and story length.