Most likely it is the same situation that has been happening with TJ&E lately. Sega THINKS they own them, start doing something with them, and the original creator guys go "uh hey Sega, remember that talk we had about you not actually owning them? And how we'd maybe like to get paid a little bit?" and then Sega realized they'd have to involve money in it and back out.
I don't think they are opposed to it, I think Sega just refuses to actually give them any compensation. That big "genesis poll" website awhile back shows the situation quite well. Earthworm Jim was doing well in the voting, then Sega realized they don't own it and had to take it off. Toejam & Earl then won. And of course there has been no word about it since because of this situation.
Dear Sega: just because it came out on the genesis does not mean you own the IP. Toejam & Earl was conceptualized and mostly developed by TWO GUYS. Sega corporate basically forced them to make the sequel into a platformer instead of the more unique format of the original. They have a history of messing with those guys, it's pretty lame. They should really just start actually paying them some money because yes I DO want TJ&E in this kind of game, and I also want future TJ&E games as well. One of the guys posted concept art for a DS version of the game with like 4 players, of course so far no one is interested. Good job, Sega.
(probably somewhat inaccurate/misinformed but that's how I feel about things right now rant over)
Re: the game itself, lol sonic in a car again, but Ryo on a forklift, and the fact that Opa Opa and the Bonanza Bros are in is pretty cool. Opa Opa should have Harrier riding on him or something.