What I think they mean by episodic is the way they split FF10, and FF13 up into 2-3 installments. Their claim on "too much content" is absurd. Seeing how they are remaking a game that already exists in one installment, so lots of balance, story, plot progression, character and world design elements are done already. Yes they have a lot more complex work to do, but I imagine the cost per license will be a lot more, less cost to distribute it, probably a similar amount if not more total sales etc etc.
i already feel somewhat cheated and they haven't even said how they are going to break it down. Installments... For the sake of a non infinite release timeline... Ok... But make them match up and carry over progress at the very least (looking at you FF13-2)
EDIT: I found a video that seems to voice my opinions almost exactly and is very articulate.