I'd think PG would make a better sequel to Streets of Rage or Golden Axe. The team behind Jet Set Radio should have had a crack at a Sonic game. Would have been loads better than '06.
My opinion on Sonic Team is that it stopped being a "team" after the release of SA2. After that, there was really no solid "team", mostly it was some guys from here, some guys from there, thrown together to make a game starring Sonic. Sometimes they had a good combination, other times they had a bad combination.
Around 2003, despite not truly knowing who worked for Sonic Team or which devs made which game, I remember having the distinct feeling that no two Sonic games were developed by the same team and that whoever was making the better games at the time were the real Sonic Team and the shitty games were made by pretenders falsely acting under the title.
