We finally find out what The Dragon Warrior is. It has nothing to do with the physical realm; that's all Po. No, the Dragon Warrior is a Spirit Warrior, whose power is against malevolent spirits. That's why Po will have normal, drawn-out fights like Tai Lung and Shen, but against a spirit? The Dragon Warrior will curb stomp spirits. Oogway knew that only a Spirit Warrior could deal with Kai.
It's not an accident Kai's main weapons are chains; stealing the Chi of people is his modus operandi, chaining them both literally and metaphorically.
Oogway and his connection to Pandas, Po in particular, as shown throughout this movie.
Pandas are what helped Oogway become the great kung fu master he is known as today, so it is no wonder he saw in the young panda Po the potential to be the Dragon Warrior, including how, through him, the Kung Fu world and the secret panda race will unite.
Also, the reason he knew that he wasn't the one who can defeat Kai. Because Kai, in a corrupted way, wasn't fighting alone (he had the chi of the other captured masters) and as strong as Oogway is, he can't fight Kai and all of that chi at once. But he knew that Po could, since as a Panda, not only would he be able to use and master chi, but he would also not be fighting alone, as he had the chi power of others willingly given to him, therefore proving to be a far better match for Kai.
Which is also why he didn't choose Tai Lung... because Tai Lung was all about the physical side of Kung Fu thanks to Shifu's unintended insistence on it, and was unable to believe in the spiritual balance, like eventually Shifu and Po do. Without it, he could not find inner peace and be able to use Chi, which would leave him helpless against Kai.
In addition, it explains his "Interesting!" in the first film when Po appeared. Remember, there are no accidents.
Oogway's iconic phrase "There are no accidents" really is more special when you think about the facts. He really had no plans on who he was choosing to be the Dragon Warrior, he just had a feeling they were going to reveal themselves. So when Po unceremoniously got in the way, Oogway chose him. He really seemed ecstatic because he was trained by Pandas, they saved his life. He likely wished he can repay their kindness one way or another, Lord Shen nearly made that impossible, but when the time for him to choose the Dragon Warrior arrives and a Panda just so happened to arrive as well, Oogway knew for a fact that this really was destiny, and a way to finally repay the Pandas in kind.
Oogway never died in the first film. He sent himself there via the Wuxi finger hold on himself (complete with peach blossom petals) as a way to a) get Shifu to stop looking to him for all the answers, and b) motivate Po to find out his own abilities. He was holding both back by just being there.
Po's issues with being a Kung Fu teacher. Wait a minute, isn't he seen as a good teacher during the credits scenes at the end of the first movie and Secrets of the Furious Five? Well, that's Kung Fu philosophy and history, not the practical side of Kung Fu. Po has encyclopedic knowledge of its history and philosophy, but has only just learned practical Kung Fu relatively recently. It's going to take a bit for him to learn how to teach it.
The fact that only Po knows any major info about Kai as opposed to most other people. Po has a fanboy level knowledge of past and present kung fu masters, so of course he'd be familiar with him. Though Po didn't recognize the name at first and even after Shifu finds some info on Kai, he doesn't go into fanboy excited mode like with the other masters, Po knows his nicknames, which he had never heard before. Meaning that Po went out of his way to study up and gain that kind of knowledge on his new foe, probably when he's seen looking over the scroll before the battle.
The fact the chi of the Panda village, Tigress, and Po's fathers was enough to overwhelm and ultimately destroy Kai. Remember what Oogway told Kai at the beginning: the more you take the less you have. Kai stealing chi could never give him the full power of it because he was trying to TAKE IT, and while it DID boost his power, it could never make him as strong as if it were GIVEN to him. This even shows in his jombies: they're shown to be not nearly as strong as the person they were, as they can be beaten back by a horde of hastily-trained panda villagers working together.
Kai and everything associated with him is green, but chi, whenever shown by anyone ELSE is golden. (Keep in mind by the color theory of the films that gold stands for heroism.) This is even shown when he's stealing it from others. Kai converts others chi to match his own...so when Po FORCED it into him in the end, bypassing that completely, he couldn't control it. It could also be that it destabilized him and caused him to lose control of what he'd already stolen. In terms of cultural colour associations, green works for evil in a Chinese context. Chinese zombies, demons, the underworld and associated malevolent entities are usually coloured green as well.
In the beginning, Oogway warned Kai about the nature of chi, telling him the more he took the less he had. Keep in mind, Kai had taken the chi from others and converted it to match his own, but he'd only done this one victim at a time while Po's chi was enhanced by the chi of both his fathers, Tigress and the entire Panda village. It's likely that taking in so much chi at once had the opposite effect and instead converted Kai's collective chi to match Po's. So he'd lost the ability to control and contain all the chi he had and it overwhelmed him. The more you take the less you have indeed.
When it is time for Po to teach the Panda village kung-fu, he learns the exact same lesson that Shifu did in the first film. Shifu couldn't make the traditional methods of teaching work for Po, so he had to adjust to his student's requirements. Po's lessons for the other pandas involved working with the strengths they already had. A good teacher works with their student to learn and adapts to them in order to bring out their full potential.
As noted above, it helps that Po knows exactly what their limitations would be, since he learned it first hand from Shifu. For him, a Panda, to have that knowledge, and to teach a village of Pandas would make it a bit more easier as well.
Unlike the first two movies, Po doesn't share his epiphany with the Big Bad in an attempt at a Last-Second Chance. While part of this is likely due to the fact Kai is too far gone and has had five hundred years to change and hasn't, Po didn't need to do that: Oogway already did it at the beginning to the story when he told him that the more he takes, the less he has. Kai stole chi from everyone else... but it's likely he never gained the realization of self that came with full mastery, and thus the more power he took from others, the less of his own he actually had. This is likely why Po's force feeding him chi in the end obliterated him: he never had the realization needed to control chi he didn't enslave to his will and lost control over it.
It may seem a little confusing that the tribe of dumpy, lazy pandas were the ones that first mastered the art of manipulating chi, but it actually makes sense. All of the very greatest kung-fu masters in this series (such as Po, Oogway, and post-Character Development Shifu) have an interesting thing in common: they know how to relax themselves and not take everything seriously 100% of the time. You would expect them to, because no one could ever achieve spiritual balance unless they had some level of relaxation to go along with hard work and discipline. Now, who are the undisputed masters of calming themselves on demand? Pandas.
Furthermore, mastering chi was about understanding yourself. The pandas are lazy and dumpy yes, but the village/tribe they came from are also very simple creatures in the best ways. They aren't good at climbing stairs, so they built a lift. They live in hilly places so they can roll where they want. And so on. They are very simple people, if intelligent and very talented (Mei-Mei is a fantastic ribbon dancer and Ling has a natural knack for kung fu / tai chi as shown in the end). Simple creatures that understand who they are to an extreme level. Not enough to naturally use chi, but enough that the entire village could pick it up when needed.
Even for Tigress and Mr Ping, who are more close minded individuals, how they master chi is through an emotion they are very certain of and are proven to be greatly driven by in the second and third films; their love for Po.
It may seem odd that Po, a relative newbie kung fu user, is able to master advanced skills like inner peace and chi manipulation before older and experienced masters like Master Shifu. It's even lampshaded by Shifu himself in KFP2 and 3. Is it really just being The Chosen One trope in play? It is really their different dispositions which result in such different learning speeds. The first movie has equal focus on Shifu's character development to Po's own, and Shifu's issues stem from being stuck in his past and his old mistakes with Tai Lung, as well as learning to let go of control. He initially sees training Po as useless and thinks that Po will never be the Dragon Warrior, due to his own conceptions as to what kind of person makes for Kung Fu Master material. Shifu starts the first movie being very close-minded, believing in his own assumptions and methods, and when he encounters something that doesn't lie within his range of assumption, (Po) he dismisses it as impossible. In contrast, Po has always been wildly enthusiastic about Kung Fu and its related philosophy and history, putting up with Shifu's abuse in the beginning of the first movie even though he knew Shifu was trying to get rid of him. Po is always immediately eager about everything he hears, be it new techniques, an upcoming battle, a chance to defend the Valley of Peace, etc. He tries every new thing he learns about, such as attempting to do splits in KFP1, inner peace in KFP2, and even chi manipulation in KFP3. Aside from being an Ascended Fanboy, ultimately Po is able to learn at a much faster pace than Shifu due to his open-mindedness, in trying new things, letting go of his own baggage such as accepting his past in KFP2 (Shifu needed years and a confrontation with Tai Lung to get over his mistakes.) This also ties in nicely with KFP3's themes of self-improvement and coming to terms with your identity.
How is it that the jombies, elite kung fu masters turned into immortal jade warriors, were so easily beaten back by the panda villagers?
Because while they are very skilled and durable, they're also mindless drones who can only follow Kai's orders. They have no way to learn or adapt to the unique fighting styles the pandas use against them.
Kai himself isn't very good with technique. It's not so much of a problem when he's fighting, but when directing the weaker jombies, their lack of strength means his normal tactics just don't work as well.
There's the problem of how the technique appears to work for him — he controls all of the Jombies at the same time. He sees everything they see, and experiences everything they do... so it would be simple to overwhelm him mentally by causing too many things to happen at once, which is how Po is able to sneak up on him. Picture trying to play three chess games at once while someone gives you a bone-crushing hug, smacks you in the face with heavy cookware, and shoves firecrackers down your throat while trying to get a world-record speedrun time on a video game.
Tying into all of the above is the recurring theme within the film and it's predecessors that kung-fu is mastered by most of the characters through their personality, and trying to have them utilise an approach that doesn't befit their characteristics is often hopeless. The Jombies at this point had been robbed of their personalities, being mere zombie minions to Kai, who cannot puppet their own unique styles and abilities to their fullest potential. This is most noticeable with Shifu, when one compares how he fights normally, with his staff, in the first two films compared to his skittering, staff-less pursuit as a Jombie. While other Jombies use weapons, it's when Kai is controlling only three of them at a time as opposed to the horde at the panda village.
Tying into this, after his jombie form spent most of the time as a mere Butt-Monkey, the first thing Master Chicken does after being resurrected is lift Master Bear above him on one wing, making apparent that Master Chicken is no weakling, he just couldn't be utilised to his full potential as Kai's drone.
Even when things start going south for him, Kai never tries to make a jombie of Master Oogway. Either he refuses to let go of Oogway's chi, even temporarilynote either out of need to stay in the mortal world or fear of losing control of it, he knows that his mission to destroy Oogway's legacy would be undermined if he had to use Oogway himself to do it, or he still sees Oogway as a brother-in-arms.
As with previous villains, Kai has issues that are a parallel to Po's. Kai also struggles with finding his own identity. Everything he does is centered around Oogway, and he is known only through his connection to Oogway. It's no wonder he gets so annoyed that his former legacy has been completely forgotten, as now he has no real sense of self. This factors into his powers as well. He doesn't have his own identity, so he takes the identities of other masters and uses them instead.
Having Kai rescue Oogway by bringing him to Panda Village is not just a quick Pet the Dog moment to demonstrate their friendship, but also adds a tragic undertone to Kai. Kai from what we see, could have very easily been a pretty awesome guy in his own right, a soldier so dependable that Oogway owes his life to him, but his obsession with stealing more power not only dumbed down his own potential, but ultimately tarnished his own legacy, getting Unpersoned by Oogway to protect the village and even in present day, being just another vile bad guy for Po to stop. As Oogway laments "the more you take, the less you have".
The Chi Kai stole tainted his eyes green throughout the film, and they become most prominent while he's using its power. In other words, Kai has literal Green Eyes of Envy.
Why does Kai know about the Wuxi Finger Hold and how does he know that it doesn't work on spirits? Given that Oogway explicitly banished him to the Spirit Realm, it's likely that's the reason he's a spirit now. This would explain why he immediately assumes Oogway taught Po the technique.
Oogway is revealed to be over 500, which probably has to do with 1) Kung Fu extending a person's life through diet and exercise, and 2) him being a tortoise, who naturally have lives in the 100+.
Word of God further implies that Oogway might have gone to the Spirit Realm voluntarily so Shifu can properly train Po. Since Oogway mentions at the end that he never tried leaving the Spirit Realm, it could easily be that he is still not at his age's limit.
Shifu's arc in the first film was mainly about his inability to train Po, because he couldn't see that Po's strengths were not the same as the strengths of the Furious Five. In this film we find out that one of Po's greatest strengths is chi mastery, and Shifu has to humble himself to ask Po to teach him.
The pandas easily relearn chi manipulation at the end of the movie. This makes sense because they know who they are and have inner peace, except for two, Li and Po. Li lacks inner peace due to the loss of his family thanks to Shen, and Po's issues with knowing who he is are part of his character arc for the film. Once those barriers fall, it should be easy to pick up.
On that note, why does Tigress easily pick up chi manipulation? It's quite possible she gained inner peace and found out who she was off-screen between movies. Considering that Po helped Shifu gain inner peace, and the flashbacks in Tigress' telling of Tai Lung's history implied that her issues stemmed from Shifu's (albeit unintentional) cold treatment of her as a child lead to her desire to be Dragon Warrior so she could make Shifu proud of her. So, once Shifu worked through his issues and gained inner peace, he was likely able to help Tigress do the same off-screen. Which she likely initiated because she saw what she could become in Tai Lung if she didn't work through those issues.
Also, her words for who she is is "a friend". In the first movie, she is very solitary even among the other Furious Five (to the point where she reacts surprised for a moment when she hears the others want to help her defeat Tai Lung). In the second movie, she seems to become aware that she begins to actually befriend everyone, especially Po. But while she reacts protective and teaches and explains to him willingly, she is still awkward about it (such as during the hug at the end). But in the third movie, she is much more involved, praises Po when he does something well and even though she doubts him sometimes, she supports him in the end. She also befriends a young panda girl, something that the old Tigress would have found bothersome. By the third movie, she has become a more open-minded and friendlier person — thanks to her friend Po. And so she defines herself as Po's friend and can release her chi, because without him and his support, she would literally be someone entirely else personality-wise. While she may not know who she is to the extent of the Pandas, she is most likely 100% certain about that part and thus gets control over her chi.
And at one point during the Jade Palace battle she manages to hit Kai with a chi blast... because she is absolutely focused on defending the Jade Palace, her friends, and Oogway/Shifu's legacy, and is able to lay aside her doubts and troubles to fight for what she believes in.
Martial arts masters, in China, are supposed to be treated with all the respect due to one's own parents, which is why Tai Lung attacking Shifu is even worse for Chinese audiences. And yet in this movie, Po couldn't bring himself fight Jombie Shifu even to save his own life. Not only does this highlight the differences between him and Tai Lung, but it also leaves room for his "other" two dads to fight, united to protect their son.
The standard method of learning kung fu is to find a style that suits your natural abilities and try to fit into that mold. Judging by what we've seen, Po's learning method is to use your natural abilities to create your own, completely unique style. That presents a MASSIVE paradigm shift if this is really going to be the future of kung fu, and opens up very interesting possibilities for a potential sequel.
Many of Oogway's earlier scenes become a lot more heartwarming after this movie. Especially with the knowledge that he was once pretty morally questionable, if not an outright villain. It puts all of the effort he makes into reforming others seem much more poignant. His original ascension scene also carries more weight now since he was not only leaving Shifu to take care of his problem, but going to take care of his own as well.
It also lends context to his extremely inconvenient death just as Tai Lung was about to attack the Jade Palace. This movie shows that a master can send themselves to the Spirit Realm, and that this manifests as them transforming into blossoms. It wasn't an inconvenient death, it was Oogway intentionally leaving the mortal realm in order to facilitate the development of Shifu and Po.
And it plays into why he had Tai Lung imprisoned rather than killing him or sending him to the Spirit Realm: because after his experiences with Kai, and his own reformation, he wanted to give the snow leopard the chance to redeem himself, too.
The color of the Spirit Realm seems to represents the color of the strongest soul there, Kai since he has been taking the chi of all the masters in that realm, except for Oogway, which is why its golden where he was, until Kai stole his too. It wasn't until he was defeated by Po that it turn completely golden again.
So far, all three films have had their villains represent the past of one of the main characters: Tai Lung — Shifu's past, Shen — Po's past, and Kai — Oogway's past.
Remember the beginning of the second film with Po eating/spitting out bean buns and Tigress jokingly saying "Your training has paid off"? Perhaps it wasn't so much a joke after all; look at how Po defeats the jombies in this film when they first appear!
Oogway's final words imply that he could come back to the mortal world, if he wanted. That's why Kai needed to absorb him: he didn't merely need a boost in power, but Oogway's specific ability.
Take a closer look at the 'armor' Li Shan makes to battle the jombies. It's a replica of Master Flying Rhino's armor that he tried on earlier. It seems Po's handicraft talent (woodwork, presumably, when he made the dol– ahem, action figures) and Power Copying (since Li Shan only wore the thing once) is In the Blood! He could also have had help from Ping, who's also handy with knives.
Seeing the Wuxi finger hold in action up close, revealed a subtle but amusing call back to the first film when Shifu uses the finger hold on Po and says that the "hardest part" is cleaning up afterwards. His delivery of the line and Po's anxiousness implied some form of cleaning up the carnage in the aftermath. However, with this film showing the voluminous amount of flower petals left behind, it does, in fact, create quite a mess that would be "difficult" to clean up afterwards.
It also always seems to create a energy wave that causes dust to blast around. While not destructive, it certainly might make things quite dusty as seen in the first movie where Po appears in a "fog" of dust.
Also, given the glowing spirit light that the petals were infused with, it's possible that could refer to the temporary weakening of the fabric of time and space...
In the intro scene(s) to Po and the Five, Po laments on how they don't always do the dramatic entrance, with Shifu suddenly coming in and saying Po's right, since the battle of the mind comes before the battle of the fist. Ironically enough, we are introduced to Kai by him throwing his blades towards Oogway in the Spirit Realm, and when he re-enters the mortal realm, he appears in a huge chi-empowered Sphere of Destruction with a lot of ham to spare. Shifu remains correct in the end though. When Kai has his big entrance to the Panda Village, Po compliments him on his great entrance... but is obviously not as excited and impressed as he acts, thus not allowing Kai the upper hand for a while at least. His constant interrupting of Kai's Motive Rant takes even more away from the entrance.
Po doesn't have a big entrance in the Spirit Realm and seems to lose. But when his friends' chi reaches him, The Dragon Warrior Po appears and HE has an absolutely stunning entrance, complete with gigantic halo, little explosion of light and everything. Needless to say, Kai can't even wrap his head around what is going on and is just stumbling helplessly around from then on.
In the final battle scene in the spirit world, when Po received his dragon battle aura, he didn't go straight to fighting Kai; he flew around, laughing and taking joy in his new ability. This is another reflection of mastering chi, as it revolves around understanding oneself: Po may love fighting and Kung fu, but he's not a violent person. He loves Kung fu because to him, it's fun and he loves it. So his first instinct isn't to take down Kai, it's to enjoy and more importantly, appreciate, his new ability. This is in contrast with Kai, who uses his chi — and the chi of the other masters — for violence and anger. He doesn't appreciate or fully respect it, hence he can't use it to its full ability. And on top of that, from what we see in the movie, chi isn't meant to be used for violence. It's meant to heal and enrich, which is reflected in how utterly Kai loses even though Po never really goes on the offensive, only countering his attacks.
Especially the last thing underlines what and who Po is: ever since the first movie, it was clearly emphasized that Po's biggest strength is using the energy given to him and throwing it back. He absorbed Tai Lung's punches and bounced them back, caught Shen's cannon balls and threw them back, and this time he takes the knives of Kai and uses them and their momentum to throw Kai around. Po was never about charging and confronting. Unless someone charges at him, he usually doesn't do anything. Because that is who he is and probably the reason why his chi is so strong that it disintegrates Kai's blades the second they come into close contact with it.
Back in the second movie, Shen initially believes there were no more pandas. In this movie we see that there's a good few of them. The Wolf Boss, however, didn't act too surprised to see Po. Except Shen followed Po's mother out of the village. He wasn't there to know that any escaped. Po's father and others got out while Shen was occupied and if any of the wolves noticed, they apparently didn't report it to Shen.
Some have noted that Po is slimmer in the later movies than in the first. In Real Life, this is because of different animation styles, but it makes sense in-universe as well. We know that he eats when he is stressed/upset; now that he has a meaning, friends, and purpose, not to mention master Inner Peace in the second movies (and is exercising regularly), of course he doesn't have so much fat!
A lot of the above have pondered why something so incredibly difficult — giving Chi — is so difficult but somehow anyone can do it by the end. That's because it's easy for large groups to offer their essential life force. Notice in the old painting it was a group of pandas, not an individual, who were depicted lending Oogway chi. Giving someone your life force is difficult. A group of people all giving a little bit of chi is easy. Conversely, stealing chi is easy, but grants less. "The more you take, the less you have." This is also the true secret of the Dragon Warrior — in order for the Dragon Warrior to be unlocked, it requires the chi of friends and allies. Once unleashed, the life energy can be used, among other things, to give it back to others.
It possible that Kai was not killed by Po; he was resurrected (since chi is life energy). After all, it restored the Jade medallions to their normal selves by having their life energy restored.
A Rewatch Bonus that ties back to where everything began: At the beginning of the first movie, Po appears to be clumsy and lazy, oversleeping, bumping into things and people, and having trouble climbing stairs. But in this movie, we find out that these are normal habits for pandas: they sleep until past noon, there are no stairs because they roll down hills and ride lifts, etc. Being the only panda in the Valley of Peace, Po has to deal with climbing stairs and constantly bumping into smaller animals because he's the largest animal in the village. Even before he learned kung fu, he wasn't necessarily lazy or clumsy; he was living in an environment that wasn't suited to his needs, surrounded by people (well, animals) who had no idea what was natural for him.
It's no wonder Kai was forgotten. History is Written by the Winners after all, and the armies led by Oogway and Kai were likely decimated after one of their leaders was injured, and the other took the injured one to disappear without a trace. Any history of the two was likely placed in the footnotes of history and Oogway himself would have likely purged any remaining history of Kai himself in order to prevent anyone from locating the hidden panda village.
Po's birth name is Lotus (莲/蓮/Lián, presumably). Upon meeting him, Li Shan calls him "Little Lotus" (小莲/小蓮 — an affectionate way of addressing a child/younger person in Chinese culture is to tack on 小/"Little" before their name). It's still a fitting name for our protagonist, because:
The lotus is considered a sacred flower, associated with Buddhas/enlightenment/holiness/spirituality. Po becomes the venerated Dragon Warrior, who ostensibly has escaped the cycle of life and death (upon his return from the Spirit World) — which is one of the perks of attaining nirvana/Buddhahood.
Lotuses bloom from muddy ponds, and have been used as metaphors for people who rose out of tragic/humble backgrounds to become renowned heroes. When Li Shan knew him, his son was still a little lotus — a flower bud. It's with his family's help that Po finally achieves his goal of being a kung fu Master great enough to be chosen as Oogway's successor — in other words, fully blooming. And of course his tragic backstory and humble origins were on display in both of the previous movies.
Every single part of the lotus is usable: petals, leaves, roots, seeds, the works. Every single part of Po's identity is valuable in his quest to fully step into his potential: the survivor of a genocide, the adopted son of a loving noodle cook, the kung fu fanboy, the teacher, the student, the Dragon Warrior. Each facet taught him lessons and enabled him to grow.
Fridge humor, but when Po deflates Kai's attempts at making grandiose boasts and declaring his plans, he tells him to "skip the chit-chat". What's another term for "chit-chat"? Yakking. And Kai is a yak.
The film also explains why Oogway has such faith in Po in the first film despite his clumsiness and awkwardness around his peers. He knows Po was not in his home turf, and that when appealing to his own strengths he'd almost certainly be much different. Indeed when inside the Panda Village, Po very much fits in and becomes a competent leader. In a moment of Swapped Roles, the extremely serious minded Tigress ends up a confused Fish out of Water in the Panda Village (and as Oogway had witnessed in the past, this wasn't the first time Tigress ended up almost unrecognisably comical due to not appealing to her specialties). Circumstances can change a character at face value.
Overlaps with Fridge Heartwarming: the first three prints to appear on Po when the village is donating their chi to him is Li Shan's, Ping's and Tigress', the people Po cares most about.
Out of the three major antagonists across the trilogy, Kai is the only one who immediately acknowledges Po as the Dragon Warrior. Tai Lung and Shen both treat Po as an absolute joke when they first meet him, with Tai Lung making jabs at his expense, and Shen being incredulous that Po could be the fated warrior meant to defeat him. Kai, on the other hand, immediately pegs Po as the Dragon Warrior and doesn't laugh him off, instead thanking Po for recognizing him in turn. This makes sense; Shen hated pandas and killed most of them in a genocide, and does not respect traditional fighting as much as his weaponry, so he doesn't see much value in pandas to begin with. Tai Lung, as the youngest of the three villains, has no clue about the significance pandas used to have to learning chi and writes Po off as fat and stupid. Kai, having lived around 500 years ago, directly knows that pandas were respectable masters of chi, which is why he takes Po much more seriously than the other two.
This is also part of why Po doesn't have a heart-to-heart talk with Kai like he does with the previous two; Shen and Tai Lung both initially see Po as a laughingstock, and are only able to be spoken to genuinely after he's proven himself to be more insightful than they assume. Kai never has a moment like this because he already understands Po's power perfectly well, he's just convinced that he can overpower him.
Master Croc's return appearance implies that Kai not only attacked Gongmen City offscreen, but also captured Master Ox. Indeed, one of the SOS messages that Shifu reads reports that Master Ox has gone missing.
Alternative theory: Master Bear, Chicken and Alligator(?) were attacked and then lured to Kai's hideout. Who says he didn't use this trick on all the masters?
For that matter, Master Thundering Rhino was probably taken as well, as he almost certainly would have ascended to the Spirit Realm when Shen killed him. Poor guy can't catch a break.
The upbeat, happy ending to the film is somewhat hampered by the fact that the Jade Palace is still a destroyed wreck and beating Kai didn't just magically fix it. While the student barracks are okay and the masters still have a place to live, the loss of such a prominent location still hits hard.
Though if one looks closely during the ending, construction scaffolding can be seen around the building.
Po used the Wuxi Finger Hold on Tai Lung. That means Tai Lung was sent to the Spirit Realm and possibly even became one of Kai's victims. Or, since he is nowhere to be seen, he's either trapped somewhere in the Spirit Realm or is in Di Yu working off his karma. Tai Lung's amulet was eventually spotted◊, but this only adds to the horror with the confirmation that even one of the most powerful masters in the series was beaten by Kai.
If it's possible for a spirit warrior to return to the mortal plane, then there's the possibility that Tai Lung can return. Whether this is horrifying or exciting is for you to decide.
Though Kai needing Oogway's chi and Po having the chi of at least a dozen people to get back to the mortal realm may dampen this horror a bit by the implication that not everyone can simply leave. Especially since Tai Lung never learned about chi which is necessary to traverse between the two realms.
We don't know how strong Kai was personally. The only actual fight we see have him already empowered by stolen chi (even in his backstory, Oogway fought him after he stole an unspecified amount of it). However, he appears to fall into the Strong, but Unskilled ground, meaning that without supernatural enhancements he was likely to be weaker than actual kung-fu masters. What if someone like Tai Lung or Shen (and we know at least one of them is in the Spirit Realm) starts going on a similar chi-stealing rampage, but becoming an even more dangerous foe?
Bao, Lei Lei, and the other panda cubs are never seen with a specific parents and appear to be Free-Range Children. Initially, it doesn't look suspicious until one remembers that Shen hunted down every panda and killed some of them. Who's to say Shen didn't continue his hunt and killing of pandas in other areas before the events of Kung Fu Panda 2, not much time has passed and the cubs appear to be toddlers. In other words, what if their birth parents were murdered and they (somehow) got away from the massacre?
The theory that Po might be living a long life like Oogway sounds awesome at first, but how would Po really feel about outliving everyone? The Furious Five, his family, everyone he cares for and loves?? And then you remember that's precisely what Oogway had to experience, many times over. He must have simply learned to deal with it...
"Being sent to the Spirit Realm" being an euphemism for death and kung fu masters dying in a flurry of petals as seen in the first movie makes the scene seem a lot less grim but Po still effectively killed himself onscreen in the climax to return Kai to the Spirit Realm.
You really have to wonder what exactly Kai used to do as a warlord to earn the nicknames he's gotten. His backstory makes it pretty clear that he was a dangerous guy long before he ever learned of chi. Even more horrifically, just how much of this was Oogway involved in, being his best friend at the time?
You have to wonder what terrible foe Kai and Oogway were facing in the backstory, that managed to so grievously injure Oogway and force Kai to retreat with Oogway. What happened to the army they were fighting alongside?
Considering that Kai doesn't understand why Oogway "betrayed" him, it's ironic for his theme to be a remix of Imagine Dragon's "I'm so sorry", since he's never sorry for anything he does.
Kai is basically all of the worst aspects of the Shin-Ra Electric Power Company rolled into one on a smaller scale. Just replace the lifestream of the planet with the chi of every living being.
◊, but this only adds to the horror with the confirmation that even one of the most powerful masters in the series was beaten by Kai.
