Ign posted a story on this yesterday too. For some reason, it's the big news despite being a decade old and has to do with a presentation given in which Aonuma gave talking about the series with a slide showing Wind Waker 2 as the next game in development.
As a Wind Waker fan, myself, it is disappointing to know that. Yet, I'm not sure what to think of the news either. Part of why I like the game is because of the sailing and exploration/sense of discovery one gets from travelling the sea to find new islands and locate treasures from various maps. With the game now on land, that changes an element of the appeal. Plus, the game had the surprise of Hyrule time-locked in a bubble under the sea. The ending confrontation with Ganondorf seemed pretty definitive in finishing him off along with Hyrule Kingdom. Thus, it would be pretty hard to come up with story elements to top that. Phantom Hourglass showed one direction with a repeat of sailing to islands on an ocean as Tetra and Link continue to search for land. But, like you said, it's not the same for various reasons.
Spirit Tracks is an example of the story continuing on land. You could either have a story of Link exploring the land and ridding it of evil to make it safe for a new kingdom to be founded or do like Spirit Tracks did and set it in the future after it has been founded. While the DS may not be able to replicate the art style as masterfully as the GameCube or HD Wii U version, it goes to show that keeping the art style alone doesn't mean a Wind Waker sequel would achieve greatness. There are a lot of other elements blended along with that element which make it the great title that it is.