It makes perfect sense if you take it in the context of there being only one Sith master and his apprentice. The apprentice succeeds the master when he becomes powerful enough to destroy him. He chooses a new apprentice and the cycle repeats itself. There would still be other Sith lords and Sith academies built to teach students the ways of the darkside. Expanded Universe material supports this view. But if George Lucas means there are only two Sith in the whole galaxy well that is just plain unbelievable.