Well, eh, what's the difference if they're on handhelds? They just look smaller.

I actually just got that last week Great game

I think it can be quite successful, but not like the Rebirth series, something more similar to Muramasa, or NSMB Wii, imagine a Castlevania multiplayer with Muramasa graphics O_O

Even Sonic 4 is being treated as a low budget project (downloadable, episodic). Nintendo seems to be the only one who will take the big risk of releasing a retail 2D game in this market.

I could see a console "2.5D" Metroidvania happening yet. Shadow Complex and Other M are really paving the way for it imo.

I'll tell you the key reason they haven't done it.  Its one key word: IGA.

Ever since he took over the series back with Symphony of the Night (called Nocturne of the Moonlight in Japan), Konami has pretty much ignored the series completely and given him total control of the series.  Following Symphony of the Night, he debated where to take the series and even hinted that his next project was going to be a 'major 2D project for the PS2' claiming it would be 2.5D and that 'I [Igarashi] feel that 2D games is the only medium that truly gives you the complete accuracy and control in gameplay.'  This came from a 2001 article which has since been removed from the source. (http://castlevaniadungeon.net/features.html )  And would it be any wonder why, as since then, Igarashi, the otherwise self proclaimed IGA, has rejected and totally ignored his own words time and time again by focusing on a plethera of 3D titles.  Which many would consider forgettable and not up to the standards of the Castlevania series.  Instead letting a secondary team focus on making 2D titles on the DS and then trying to claim that '2D gaming is alive and well' (http://www.qj.net/psp/interviews/koji-igarashi-2d-gaming-not-dead-its-all-about-love.html ).

Its only been in the last year, which will be more than 12 years since Symphony of the Night, that any announcements of a game made by ANYONE besides Igarashi and his team have surfaced.  Which was the new Lords of Shadow being developed by Murcury Steam Productions and produced by Hideo Kojima.  And then, just this year, we were surprised to have a new Castlevania title on the WiiWare service, Castlevania Adventure Remake.  Though it too was produced by Igarashi.

So, it does seem that, at least partially, Konami may be looking to try to branch out the Castlevania series.  But I highly doubt that Igarashi is going to be taking his hands off the series any time soon.  I just hope he at least stays away from anything that has to do with '3D'.  And stops making weak Symphony of the Night clones with half the content.