To cut the long story short: Diablo 3 wasn’t announced in Blizzcast No.2. But this time the usual WoW and Starcraft 2 mush was sweetened with a pinch of Diablo. The creator of the original Diablo storyline and Blizzard’s Vice President of Creative Development Chris Metzen left a lot of space for speculations:

Chris Metzen:

“As far as handling continuity, and the broad story for the Diablo franchise, I guess that we’ll have to see how that takes shape.”

Further the conjectures about a possible Diablo 3, which is chronologically settled before Diablo 1, could be proven true.

Chris Metzen:

“…With the Sin War as well, while we didn’t want to get into ‘time-travel’ or ‘character reliving history in his head’ – it’s more of a straight look at
ancient events – I think I may be roasted for this, it happened about a thousand years before Diablo I, and really, the Sin War trilogy was meant to take a
snapshot of the Diablo world as it was and really show you the events and characters that set in motion everything that plays out in the present day.”

This kind of storyline could be very interesting and it leaves a lot of space for new innovations.