Miyamoto took story elements out of the new Paper Mario because he felt that gamers didn't care about the story.
(The following are not words from Miyamoto, but reflect what he had found):
"With regard to the story, we did a survey over the Super Paper Mario game in Club Nintendo, and not even 1 percent said the story was interesting,"
This is what must have gone on in his head:
"Hmm.. The story in Super Paper Mario was fantastic! People didn't care for it? People must not like stories."
When in reality, this was the truth for gamers:
"This story is shit, how could Nintendo make such a bland game after the first two Paper Mario games had such great stories and gameplay?"
Well, that's what I think, at least. Hearing Miyamoto's words makes me sad, because I *do* care about story. I love hearing stories - the original two Paper Mario games' stories are some of my favorite ones throughout all video games. =/