I hate Phantasy Star III with a passion.
However, I do think if a lot of things were fixed it could be a really good game.
As far as combat goes, you have to ask yourself: What makes combat interesting?
And I say meaningful choices. In vanilla PS3, you either attack or heal. Attack magic is too weak to be useful, and the buffs are too situational. I think the game could be more fun if attack magic was given a significant buff and enemies have elemental weaknesses (to the point where it's worth using) and the buffs/debuffs we were given were made useful.
That would go a LONG way towards making PS3 into a playable state for me.
Other things:
Reduce the size of the dungeons/maps/towns. There's too much "dead space" in the game. Most of the time spent walking is done through areas that are aesthetically dull. Even though PS1/2 have slow walking speeds, the changing aesthetics of the areas you go through aren't dull and manage to keep you interested whereas PS3 has a default color - dull and earthy. That again is something that could stand to be fixed.
Oh and fix Divisia. Nothing makes me rage harder than that forsaken town.
If you want to hear more of what I think could use changing, I can ramble and rant on for quite some time
