The following of course is a comment on the quote not on your comment, but no Kochen Specker is not a generalization of EPR to 3 particles. It's easy to come up with a generalization of EPR in 3 particles - just exhibit a 3-party entangled state! (e.g GHZ state). K-S theorem exhibits something a lot more subtle than entanglement known as contextuality. There are examples of systems which have the K-S property but doesn't have any entanglement.