Originally Posted by The Morningstar
But that is the point. He starts off as nothing but an annoyance, but after what happened, he now has a motive for becoming a fully fledged bad guy.
And his role could be reversed. Instead of him being the "benefactor" like he was to Vanko, he could have a benefactor backing him up.
But if he was completely incompetent in the second movie, why would anyone buy him as a threat in the third? Hammer being angry wouldn't make him more competent. He may have motive to be a more threatening villain, but he doesn't seem have real capability that would make him a threat to Iron Man.