While i'd love to play a demon character (Succubus rogue please :P ), the only reason for a group of demons to rebel i can come up with (Since "Demon turns good and nice" is a bit tacky) is that they're tired of fighting for Sargeras, but why would they then fight for alliance or horde?
Illidan got demons to give up on the legion and fight for him in exchange for power from a power source he had in the Black Temple. It could be possible to create a new demon faction with some form of new leader, if said leader had enough supply of power to convince enough demons to fight for him/her.
But I doubt this will ever happen as it's difficult enough for Blizzard to create story, quests and the like for only two factions. How the heck would BG's work? Two losing one winning? Actually, capture the flag with three teams does sound kind of cool, but I'm afraid they probably wouldn't be able to make it work... However, adding a demonic race to the Horde would probably be possible, if lore behind it is created for why they would serve them.
The burning legion are aliens to Azeroth. A better 'evil' third faction would be Old Gods affiliated; such a faction would be more 'native' to Azeroth than either the Alliance or the Horde, still hostile to the Burning Legion (well, most things), and has a great many cool cantidate races sich as Naga, murlocs, Quraji, Ogres, twilight cultists of many stripes, and faceless ones (seriousl how cool would that be?).
Third faction? No. But it would be a great way to preserve PvP if they wanted to have Ally and Horde come together for once and for all. The opposing side? Fallen champions, servants of the Legion. In going PvP you basically 'fall' to a Fel version of your char and go around trying to kill Ally and Horde both, who also try to stop you.
Peeps, don't go that far into lore or world re-design, the reason why this won't work is simple:
Creating a faction would require you to make new races which in turn would require new models and new animations.
It's already hard and resource consuming to update the current old models, what makes you think that it's easier to make new ones needed for a new faction? Not to mention that from that point on they will have to fit all pieces of armor gear on the new race's models too?
Even if they did decide to add a new 3rd faction it wouldn't make it for the upcoming expansion, they would have to start working on it now and possibly make it for the expansion after that.
So is it worth it? No. Better focus these resources on updating all the current player models/animations, which is already long overdue.