NAMCO apparently had little to do with what happened to the project. After Soraya Saga was removed she left her final thoughts on the site listing, among other things, a notice that the 'parent company' was not involved in the change-over and that the decision was made by Monolith Soft itself. source

That site also lists all the things that were cut from Episode II for those interested, but also lists spoilers for that which wasn't so read with care.