I would never do another KQ game, remaking KQ3 was a chore by the end, something SQ2 never turned into for me. I felt very constrained by the cutesy tone of the KQ games and that we couldn't really do anything interesting with them. The rules of KQ are that King Graham was always the HERO (in capital letters), never down, never defeated. We stretched that a little with Graham showing some emotion in the extra cutscene we did of Rosella sacrificing herself, but I don't think we could do more. The basic rule of a drama is there has to be conflict of some sort to drive the narrative, and I don't think that's easy to do with KQ.
As Steve said, there's plenty of other Sierra IP's we would suit a lot better. I love the SQ games, and a new Freddy Pharkas or Manhunter game would be fun projects.
I think it comes down to doing something you love, and I don't love KQ.