Some of what derailed it had to do with other projects that cast members left to pursue. Both Thayer David and Dennis Patrick left halfway through to do movie projects. It was because Dennis Patrick was unavailable that Dan Curtis (or whoever was guiding the plot at the time) came up with that stupid thing with that other ghost.
The other thing that seriously messed it up is that they changed track abruptly twice during the storyline--first, in response to hate mail from fans, they began to make Barnabas more sympathetic and resistant to the Leviathans much earlier than originally planned. And then, again because of hate mail but also, I suspect, because of the shooting schedule for the first movie, the storyline was hastily wrapped up a month or two earlier than originally planned.
I still find Leviathans perhaps the most fascinating storyline just because they really tried to do something different. For all its faults, after Leviathans the stories basically re-hashed what had worked before--the Angelique thing in PT 1970 (which I do love because it was so stylish and had such great scenery-chewing opportunities once they brought the regulars back), the ghosts and possession and Satanism, etc. in Summer of 1970 and 1840.
Nevertheless, I mustn't forget the brief sojourn in 1995. *That* was really bizarre, even by DS standaards! Sy Tomashoff and the crew deserved Emmies for what they did with the sets for those two weeks!
G.