Lejuan
Super Freak
I really don't think it was Jackson's ego turning things into a trilogy. From everything I've seen, read, and know he really felt like he had enough material to do three films. As far as Radagast the worst thing about him is the bird poop the rest of the character is fantastic IMO.
I think it's more likely that, given the pacing of the novel, he could've done it in either one or three films, and he opted for three. But he only had enough for three by including characters and events that were presented radically different from how they were treated in the book. ie Radagast, almost a throwaway line in the book, gets an entire scene. The character may have been 'cool', but he had no place in the film. The most generous thing one could say about his inclusion is that it fleshed out the universe a bit and provided some diversion from the heavy focus on the company.