The thing about launch games is that the economics of it means that the motivation for creating a polished experience isn't there. Because there's so few games out at a console's launch, the quality doesn't have to be very high. Whereas a game might be docked in reviews for the problems you mentioned, launch games get a lot more leway. So Ubisoft could've delayed the game, but they probably would've missed out on a couple hundred thousand units in sales, while spending even more money.
From what I've read, Red Steel has been a financial success for Ubisoft, so I think creating a sequel is definitely on the cards. That's the other benefit of being a launch title, you can establish a new IP and then do great on the sequel.