They had stumbled through concept after concept, built sets, torn them down, filmed scenes, thrown them away, fired directors and fired crew. When Sigourney Weaver held out for more money, they wrote scripts without her, when she came back, they did rewrites to cram her back into the story. Very late in the game, they brought in a young director named David Fincher--whose only experience was with Madonna videos--to start shooting after most of the budget had already been scattered to the wind like parade confetti.
What squeezed out the other end of the development's digestive tract was a movie that, just seconds in, meaninglessly kills off the three characters Ripley spent the last film saving. The hundreds of aliens were replaced with one small alien dog.
The vast, futuristic landscape was replaced by one dim, dirty building. The frantic gunfights were replaced by scenes of identical, bald cast members staring quietly at the wall. The main character commits suicide at the end.
So what happened?
Budget, mostly. My Alien 3 would have cost twice what Aliens did, with its sprawling sets and swarms of animatronic creatures (remember CGI effects were new and still very expensive in 1991). At the end of all that I'd have an R-rated sci-fi film with almost no chance of making back its budget (Aliens only made about $85 million, $150 million if you adjust for inflation).
So, they settled for this stripped-down version on a budget of $50 million, filmed in an abandoned lead factory. Then, they watched as fanboys like me piled into the theater on opening day anyway.
This is why they're rich film executives, and I live in my car.