The M40 is a 7.62mm sniper rifle. There is no M40 in Terminator 2. Additionally the M40 is also the fictious "30mm" grenade for the M41A Pulse Rifle in Aliens. Supposedly in the future war scenes there are a few pulse rifles, but I doubt that's what you meant.
I'm going to assume you were talking about the M79 "blooper" 40mm grenade launcher. If that's the case there was a grenade launcher in T3 that the Terminator used against the T-X in the CRS command center. The grenades, more realistically, did not explode since they did not reach the minimum arming distance.
As for the Terminator character being a wuss, that is unlikely. He is stronger and faster in Terminator 3. He gets more weapons, and he gets better weapons. He uses an M1919A4 .30'06 machine gun, a .45 caliber Heckler & Koch UMP, he uses a Russian RPG-7, a six-shot rotary grenade launcher, a G36K carbine as well as a General Electric M134 minigun that he commandeers from an enemy robot.
And if I recall correctly, T2 is the movie where the Terminator acts all emotional. While his act in T3 is not as good as in previous movies, it isn't because he is a wuss and has weaksauce weapons.
And I have to wonder what violent scenes happened in the second one, because the Terminator kills nobody. The T1000 stabs a few people, but that isn't very interesting. It's a cool effect, but it's definitly not what set Terminator 2 apart from T3.
In the first movie, yeah there is some violence. The Terminator kills more people in the police station than the T1000 and the T-X combined.
And the CG looking fake? What about the fake looking animatronics and stop-motion in the first movie? Apparently that makes the first movie "vintage" and cool, but fake special effects make T3 suck? Okay. How about the fake looking makeup in T2. Yeah you might be fooled the first few times you watch it, but pretty soon it just doesn't feel right anymore.
I'm not saying T3 is awesome, or even close to level of T1 or T2, but the reasons you stated aren't really valid. It seems to me that there are deeper, more important reasons why people didn't connect with T3, and they decide that it has no redeeming characteristics and try write off everything in the movie as bad. I don't think this is true though. T3 did have it's moments, just not as many as the previous films, and had it had a weaker story that we've already played through twice before. That aside, fine movie.
And let's be real, despite some cheesiness, the T850 versus T-X bathroom brawl definitly eclipses the T1000 and T800 handfight in T2 and the Reese wtih a pipe versus the T800 in T1. It was nice to finally see the Terminator unleash some of that inhuman strength with full fury and really tear up an entire room.