I guess I can see the logic though.

Right now, they are working on SAO Movie with completely new story. That is why we barely know anything about Season 3.

I know they may not be technically cannon but they could always do some of the side stories for a third season. Since SAO has gotten so popular it'd seem like a waste of momentum for the Anime to simply stall out waiting on the next Arc to be finished and theres other material they could do if the director is so firmly against starting on the next Arc. A season of filler might help flesh the characters out a bit more.

I can understand the directors logic. Why would you start directing something if you do not know what the ending of it will be. Thats kindof messed up. I know other things such as say writing a novel its best to have how you want the ending in mind when you start writing. That way as you write you can lead things into that ending. Same with writing essays. When you write the introduction you already have the ending basically done. Its a very smart move and it prevents later issues from cropping up such as stopping midway through the anime and potentially losing money or people and such.

I can understand that he wants to know how it will end beforehand but atm it seems kind of unneeded.

The Alicization arc is already 9 volumes long so the whole arc wont fit in the 2 cour season that SAO got up till know anyway ( normally they used 4 volumes for 24/5 episodes) so either they would have to split Alicization into 2 season or make it at least 50 episodes long ( or both, they make it 2 season but the first season gets 3 cour, even if that is kind of rare, to animate the first part up to Qunellas defeat and then start a 4th season for the remaining 3+ volumes).

Consequently as long as they don't try to either press all 9+ volumes of Alicization into 25 episodes ( oh god please don't do it) or make SAO into a more or less long running series, even through I don't know of a Light Novel adaptation that got that kind of treatment ( well could be just my lack of knowedlege),  they will have to make a cut in the middle of it anyway.                                                                                                                          Therefore imo it would kind of make sense to start with the first half of it now ( and maybe get the season out there only 2 - 2 1/2 years after the second season of the anime ) and then give us the second half a year or two later when the Alicization arc ended ( it would be at least 3-5 more volumes until then if Kawahara-sensei keeps up his usual peace ) instead of making the fans wait for years after season two of the anime ended.

Thats true but how do they know what they should include in a episode really? What if there was something that occured that we thought in the novels was minor but wound up to be something big in a future novel. The Directors of the anime would not originally include it at all as they didn't think it was much of anything until later when we find out it was. This is some of the things that rushing a project cause.

Another option here is that they plan to release the arc as a single, massive season like what was done with Fullmetal Alchemist: Brotherhood. If that's the case then it's only natural that they have to wait for the conclusion of the arc before animating it. Perhaps they've already got a lot of work done on it, but they can't finish it yet because there is no conclusion yet.

Thats possible too. We should just be happy though that they are taking their time as it means their putting in more effort into it.

As of right now, is the Alicization arc finished? I can't very well keep up with the LN but I believe that because basically all of the SAO audience wants season 3 and SAO is very popular, the third season will come sometime late this year. If I'm correct, I think that the second season ended late 2015, so what I'm thinking is that they will just make a huge third season to cover all of the Alicization arc.

(It's March now as of my reply)

It's done. Well, the 18th volume of the light novel marks the end of the arc, but the 19th is a side-story that takes place within the arc. Reki Kawahara is probably going to take a break from doing a whole new arc for a while.

And a third season was "teased" at the end of Ordinal Scale, but hasn't officially been confirmed by A1 or Kawahara. We do have VA's confirmed for Alice and Eugeo for the video games, but we're not 100% sure if they'll return for the third season.