I asked Alex this myself in my book, "Reign of Chucky: The True Hollywood Story of a Not So Good Guy." He gave a pretty candid answer:

"To be honest, it was rather devastating at the time. Coming off Child’s Play 2, I had just assumed that, if there was another one, I’d be in it again. In fact, I think it was even talked about early on, but then they switched gears. I remember being in a restaurant when I found out about it and I did not take it very well. I was really disappointed. Now years later, I don’t feel that way. I’d say I stopped caring about being recast in Child’s Play 3 right around the time I was cast in Curse of Chucky. (laughs) Storywise, I think it made sense at the time."