By releasing it in a episodic way I think Square can truly achieve their (and our) vision of the game, and they can guarantee a high quality release in a relatively short amount of time. Also they can receive important feedback with every episode and they can reinvest the money earned to make the game even better. Of course pricing is the key here and I hope they won't fuck up in this regard.
Don't expect any less than $60 per game. And perhaps people should stop using the term "episodic" because that's one of the biggest sources of the confusion. Episodic is more of a Telltale games term, where you get 2-3 hours of a game for a smaller price, that's not a self contained full game experience. That's why people expect shorter games or that the price will be lower. Square didn't say "episodes". They said "multi-game series". Sounds familiar? It should.
"Each entry will have its own unique story. As a gaming experience, each entry will have the volume of content equal to a full-sized game.”
That is how they said they are going to do it. Expect full priced full size games for each entry. Also expect the FF7 jurney to be a lot more fleshed out than it originally was, as you mentioned. Because they said that they not only don't want to cut out content, but they want to add even more to it. So the first game could indeed take place in Midgar. A much more fleshed out Midgar where we may see things like the other Sectors we didn't see before. While the second game may be open world. Etc.
I think many of the people working on the project genuinely care about the biggest and most influential title of their carreers, and really want to make it as good as possible. They said their reason for starting it now was because they are all getting older, and if they're ever going to do it, now is the time.
If each game is good enough and worth the price, then I will buy it. I've played several good muti-game series' before that I wouldn't want shortened down into one single game experience. .hack//G.U. for example.