It is against the interest of the EU to allow countries with existing territorial disputes to enter the EU.
It's true, but getting the entire Western Balkans into the EU has to be considered the "end game" for the EU as far as expansion goes (okay, there's Georgia, but I think realistically, they'd be better off in EFTA along with Israel eventually), and an obvious red line for Serbia is being forced to accept Kosovan independence. Perhaps it again goes back to legal fictions - perhaps it could be agreed that electors in Kosovan territory are responsible for the administration of Kosovo and that status cannot be changed without the agreement of voters there.
Forcing Serbia to agree to Kosovan independence will never work, and from the EU's point of view, it's much better to have Serbia inside than outside. Realistically, there's no way for Bosnia to join the EU without Serbia at the same time (not that it's likely to happen anytime soon...), and likewise with Kosovo. If Kosovo doesn't join, then it also keeps the door shut on Albania, so it effectively leaves only Montenegro and Macedonia as potential members anytime soon.
Frankly I don't want any Balkan country in the EU...we have to many differences right now since the latest enlargement as it is...
I still think the 2004 expansion was stupid and misguided. Estonia and Slovenia were ready, possibly Malta too. The rest? No.