Blizz "3rd Team" title upcoming..

Well, it's easier for them to release one or two expansions for WoW than to make a completely new game(Diablo 3.) And the money made probably wouldn't differ much between the two.

Sooner or later, they'll NEED a new game because the game engine will be so far behind newer MMOs that people will eventually be migrating to the newer, more colorful ones. Maybe not literally, but I think you know what I mean.

A WoW2 may be a possibility, as its universe does give a lot more diversity for MMO players (race-wise and faction-wise) where a Diablo MMO would have trouble with diversity as you can really only play as Human in a factional 1v1 (Humankind vs. Hell).

After thinking about it a bit more, I'm not so certain that the next MMO Blizzard puts out would be a part of the Diablo series. There are subfactions to the whole humankind thing, but so far those have been fairly straight-lined regarding class, so they'd have a lot more world development to go before this would be ready Lore-wise.