The Third Game in the Game Series Formerly Known as Diablo

Some of you who played Diablo 1 and/or 2, should have noticed that in the storyline you (the adventurers) succeded in slaying the demon Diablo (and his brothers elsewhere) in Hell. To my knowledge, Demons that are slain on Sanctuary (the primary plane of existence, where mortals live in the Diablo-world) are simply reborn in Hell. Demons that are killed in hell, die permanently (I think, other sources may contradict this though.) Even if Diablo did die in Hell, he would have reborn due to his soulstone. But the adventurers crushed it upon the Hellforge, thus Diablo is (I assume) permanently destroyed.

Now, Blizzard announced a third game in the series, named Diablo 3. Blizzard isn't known to surprise their gamers, but this seems odd still. Diablo is dead - why would they name the third game in the series Diablo as well? Sure it would lead to confusion, but people will assume that a game named Diablo will properly be focused around something called Diablo.

Or am I wrong?

(Also, now that the Worldstone is broken - will the borders between the worlds be broken? And will Inarius from the Sin War make an appearance? Now that the Prime Evils are dead (Super Diablo Bros.) will the Lesser Evils (Andariel, Duriel, Azmodan and Belial (maybe Lilith?) rise up to the roles of big bad mega-villains?)