WoW2 has always been little more then a vague idea of a game Blizzard should make once WoW has outlived its usefulness. However, recently I've been starting to think it might be time to at least lay the groundwork for a sequel.
So why now?
I'm sure everyone has heard that World of Warcraft subscriptions are down 5% since they peaked in late WotLK. This doesn't indicate WoW is dying, but Blizzard has acknowledged that this is a faster drop then what they saw after the release of BC and WotLK. Based on my own analysis, I believe it's because Cataclysm didn't bring as much new to the table as BC and WotLK did. That doesn't mean Cataclysm is a bad expansion per say, it was very good at what it tried to accomplish, but nothings fundamentally changed about how you play the game.
Throughout it's life cycle BC brought us arenas, heroic dungeons, more sensible questing, Badges of Justice, sockets/gems, made 10-man raids far more important, changed large raids from a 40-player to 25-player cap, daily quests, split PvP and PvE gear and gave the Alliance Shaman and the Horde Paladins.
WotLK brought Achievements, Death Knights, Vehicles, Phasing, 10/25-man raids, hardmode raids, glyphs, and the Dungeon Finder.
In both cases these are all things that fundamentally changed how the game was played. You may feel that the specific changes hurt the game, or could of been implemented better, but you can't deny they fundamentally changed how the game is played.
In Cataclysm they simply improved existing systems. Raids don't use a system all that different then ICC, the point system is just a modified emblem system, we went from having 2 types of glyphs to 3 types, new races and race/class options don't change how you play the game all that much, the new talent system only significantly changes leveling around 10-40 or so, even the upcoming Molten Front is just an improvement on the Isle of Quel'Danas concept. All of these changes improved game play significantly, but they didn't really change how the game is played. About the only radical feature I can think of is Vashj'ir, but that became an optional leveling zone without even any digsites to temp players back in once they finish the zone. As a result, experienced players are getting burnt out faster then they did in previous expansions even through there isn't anything "wrong" with Cataclysm by any rational definition.
How does this all pertain to WoW2?
I think the reason why Cataclysm didn't introduce many radical new concepts is because WoW has become matured so much that anything that really changes how the game is played would either be backtracking or something that just isn't practical within an existing game (when other companies have tried to do so it's consistently an unmitigated disaster). Things like adding a 3rd faction, moving races from one faction to another or dropping them completely, allowing players to break from the Horde/Alliance, destroying cities, adding or removing gear slots, making crafting more interactive, etc. Story-wise you could set the whole thing years or even centuries after WoW, because honestly the people of Azeroth could use a break from yet another evil stirring things up every 2 or so years. The possibilities are endless.
The current version of WoW most likely has 2, maybe 3 expansions left in it. It's not going to die anytime soon, and I think we can all agree that it would be nice to wrap up the story of WoW in a proper finale rather then just leave things hanging after Cataclysm. Going forward Blizzard should keep WoW2 in mind as they create these last few expansions. Characters that will be included in the sequel need to be further developed, while characters that won't be need to have their own stories resolved. Subtle hints of things to come in WoW2 could be spread throughout the game, a cryptic prophecy here, an odd reference there. They could even start full development of WoW2 before the final expansion is released to minimize the time between WoW's finale and the release of the sequel.
TLDR
Cataclysm, while not being a bad expansion per say, did not bring anything new to the table because there isn't anything new for it to bring without bad things happening. This has caused subscriber numbers to drop faster then after the release of BC or WotLK. Making WoW2 is the solution since it can bring lots of new things to the table without said bad things happening.