You nailed it. We already got the Dreamcast 2. It was called the Xbox.
Peter Moore moved from Sega to Microsoft. Many Sega franchises, some that were popular on the DC, moved to the Xbox. Shenmue, Crazy Taxi, House of the Dead, Jet Grind Radio and Panzer Dragoon all got Xbox-exclusive sequels. Even Toejam & Earl got a revival on the Xbox.