I think that they had the right idea, here. Just hack away everything that wasn’t the first Halloween — ah, the first-first Halloween movie — and go on from there. Continuity? Heh. Slasher movies, my friends: slasher movies. Call it an ‘alternate timeline’ if you like, and go on from there.
Besides, I hear that the suddenly-only sequel is pretty good. That makes it easier to get away with this sort of thing.